Nuclear Ambitions and Issues in the Middle East [1 ed.] 9781616683894, 9781616683535

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Copyright © 2010. Nova Science Publishers, Incorporated. All rights reserved. Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

Copyright © 2010. Nova Science Publishers, Incorporated. All rights reserved. Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

POLITICS AND ECONOMICS OF THE MIDDLE EAST

Copyright © 2010. Nova Science Publishers, Incorporated. All rights reserved.

NUCLEAR AMBITIONS AND ISSUES IN THE MIDDLE EAST

No part of this digital document may be reproduced, stored in a retrieval system or transmitted in any form or by any means. The publisher has taken reasonable care in the preparation of this digital document, but makes no expressed or implied warranty of any kind and assumes no responsibility for any errors or omissions. No liability is assumed for incidental or consequential damages in connection with or arising out of information contained herein. This digital document is sold with the clear understanding that the publisher is not engaged in rendering legal, medical or any other professional services.

Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

POLITICS AND ECONOMICS OF THE MIDDLE EAST Stabilizing and Rebuilding Iraq Russell E. Hargrove (Editor) 2009. ISBN: 978-1-60692-366-5 Public Opinion and Solution Prospects For Israeli-Palestinian Peace Jacob Shamir and Jim Zanotti 2009. ISBN: 978-1-60876-062-6 2009. ISBN: 978-1-61668-879-0 (E-book) Progress in Iraq Shawn R. Murray (Editor) 2010. ISBN: 978-1-60692-125-8

Palestinian History, Politics and International Relations George D. Hayes and Marcus P. Cooper (Editors) 2010. ISBN: 978-1-61668-809-7 2010. ISBN: 978-1-61668-877-6 (E-book) Iran: Issues and Perspectives Stephen D. Calhoun (Editor) 2010. ISBN: 978-1-61728-007-8 2010. ISBN: 978-1-61728-249-2 (E-book)

Regional Influences on Iraq Joshua D. Hymowitz (Editor) 2010. ISBN: 978-1-60692-132-6 2010. ISBN: 978-1-61728-065-8 (E-book)

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Israel vs. Hamas Nejc Kardelj 2010. ISBN: 978-1-60741-518-3 Regional Spillover Effects from Iraq's Upheaval Borje Ostergard (Editor) 2010. ISBN: 978-1-60741-520-6 Iraqi Refugees: A Humanitarian Crisis? Agustin Sánchez (Editor) 2010. ISBN: 978-1-60876-131-9 Iraq: Forward, Backward or Nowhere? Frederick M. Golenberg (Editor) 2010. ISBN: 978-1-60741-018-8 Nuclear Ambitions and Issues in the Middle East Nathan E. Cohen (Editor) 2010. ISBN: 978-1-61668-353-5 2010. ISBN: 978-1-61668-389-4 (E-book)

Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

POLITICS AND ECONOMICS OF THE MIDDLE EAST

NUCLEAR AMBITIONS AND ISSUES IN THE MIDDLE EAST

NATHAN E. COHEN

Copyright © 2010. Nova Science Publishers, Incorporated. All rights reserved.

EDITOR

Nova Science Publishers, Inc. New York

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Copyright © 2010 by Nova Science Publishers, Inc. All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means: electronic, electrostatic, magnetic, tape, mechanical photocopying, recording or otherwise without the written permission of the Publisher. For permission to use material from this book please contact us: Telephone 631-231-7269; Fax 631-231-8175 Web Site: http://www.novapublishers.com

NOTICE TO THE READER The Publisher has taken reasonable care in the preparation of this book, but makes no expressed or implied warranty of any kind and assumes no responsibility for any errors or omissions. No liability is assumed for incidental or consequential damages in connection with or arising out of information contained in this book. The Publisher shall not be liable for any special, consequential, or exemplary damages resulting, in whole or in part, from the readers‘ use of, or reliance upon, this material. Any parts of this book based on government reports are so indicated and copyright is claimed for those parts to the extent applicable to compilations of such works.

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Independent verification should be sought for any data, advice or recommendations contained in this book. In addition, no responsibility is assumed by the publisher for any injury and/or damage to persons or property arising from any methods, products, instructions, ideas or otherwise contained in this publication. This publication is designed to provide accurate and authoritative information with regard to the subject matter covered herein. It is sold with the clear understanding that the Publisher is not engaged in rendering legal or any other professional services. If legal or any other expert assistance is required, the services of a competent person should be sought. FROM A DECLARATION OF PARTICIPANTS JOINTLY ADOPTED BY A COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND A COMMITTEE OF PUBLISHERS. LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Nuclear ambitions and issues in the Middle East / editor, Nathan E. Cohen. p. cm. Includes index. ISBN HERRN 1. Nuclear nonproliferation--Middle East. 2. Middle East--Politics and government--1979- 3. Nuclear energy--International cooperation. 4. Nuclear energy--Government policy--United States. 5. Nuclear energy--Government policy--India. I. Cohen, Nathan E., 1960JZ5675.N77 2010 355.02'170956--dc22 2010012288

Published by Nova Science Publishers, Inc.  New York

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CONTENTS Preface

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Chapter 1

vii Iran‘s Nuclear Program: Tehran's Compliance with International Obligations Paul K. Kerr

13

Chapter 2

Iran Sanctions Kenneth Katzman

27

Chapter 3

Pakistan‘s Nuclear Weapons: Proliferation and Security Issues Paul K. Kerr and Mary Beth Nikitin

53

Chapter 4

Iran‘s Nuclear Program: Status Paul K. Kerr

73

Chapter 5

The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation Christopher M. Blanchard and Paul K. Kerr

Chapter 6

U.S. Nuclear Cooperation with India: Issues for Congress Paul K. Kerr

95 115

Chapter Sources

159

Index

161

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PREFACE This book presents and reviews the current nuclear ambitions and issues of several Middle Eastern countries such as: Iran, Pakistan, United Arab Emirates and India. This new book provides background information on the nuclear programs of these countries, reviews developments to date, analyzes proposed nuclear cooperation with the U.S. and discusses relevant legislative proposals and options. Chapter 1 - In 2002, the International Atomic Energy Agency (IAEA) began investigating allegations that Iran had conducted clandestine nuclear activities. Ultimately, the agency reported that some of these activities had violated Tehran‘s IAEA safeguards agreement. The IAEA has not stated definitively that Iran has pursued nuclear weapons, but has also not yet been able to conclude that the country‘s nuclear program is exclusively for peaceful purposes. The IAEA Board of Governors referred the matter to the U.N. Security Council in February 2006. Since then, the council has adopted five resolutions, the most recent of which (Resolution 1835) was adopted in September 2008. The Security Council has required Iran to cooperate fully with the IAEA‘s investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to its IAEA safeguards agreement. However, an August 2009 report from IAEA Director-General Mohamed ElBaradei to the agency‘s Board of Governors indicated that Tehran has continued to defy the council‘s demands by continuing work on its uranium enrichment program and heavy-water reactor program. Iran has signed, but not ratified, its Additional Protocol. Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran‘s nuclear program. Most of these questions have essentially been resolved, but ElBaradei told the agency‘s board in June 2008 that the agency still has questions regarding ―possible military dimensions to Iran‘s nuclear programme.‖ The IAEA has reported for some time that it has not been able to make progress on these matters. Chapter 2 – Iran is subject to a wide range of U.S. sanctions, restricting trade with, investment, and U.S. foreign aid to Iran, and requiring the United States to vote against international lending to Iran. Several laws and Executive Orders authorize the imposition of U.S. penalties against foreign companies that do business with Iran, as part of an effort to persuade foreign firms to choose between the Iranian market and the much larger U.S. market. Most notable among these sanctions is a ban, imposed in 1995, on U.S. trade with and investment in Iran. That ban has since been modified slightly to allow for some bilateral trade in luxury and humanitarian-related goods. Foreign subsidiaries of U.S. firms remain generally exempt from the trade ban since they are under the laws of the countries where they

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viii

Nathan E. Cohen

are incorporated. Since 1995, several U.S. laws and regulations that seek to pressure Iran‘s economy, curb Iran‘s support for militant groups, and curtail supplies to Iran of advanced technology have been enacted. Since 2006, the United Nations Security Council has imposed some sanctions primarily attempting to curtail supply to Iran of weapons-related technology but also sanctioning some Iranian banks. U.S. officials have identified Iran‘s energy sector as a key Iranian vulnerability because Iran‘s government revenues are approximately 80% dependent on oil revenues and in need of substantial foreign investment. A U.S. effort to curb international energy investment in Iran began in 1996 with the Iran Sanctions Act (ISA), but no firms have been sanctioned under it and the precise effects of ISA—as distinct from other factors affecting international firms‘ decisions on whether to invest in Iran—have been unclear. While international pressure on Iran to curb its nuclear program has increased the hesitation of many major foreign firms to invest in Iran‘s energy sector, hindering Iran‘s efforts to expand oil production beyond 4.1 million barrels per day, some firms continue to see opportunity in Iran. This particularly appears to be the case for companies in Asia that appear eager to fill the void left by major European and American firms and to line up steady supplies of Iranian oil and natural gas. Some in Congress express concern about the reticence of U.S. allies, of Russia, and of China, to impose U.N. sanctions that would target Iran‘s civilian economy. In an attempt to strengthen U.S. leverage with its allies to back such international sanctions, several bills in the 111th Congress would add U.S. sanctions on Iran. For example, H.R. 2194, H.R. 1985, H.R. 1208, and S. 908 would include as ISA violations: selling refined gasoline to Iran; providing shipping insurance or other services to deliver gasoline to Iran; or supplying equipment to or performing the construction of oil refineries in Iran. H.R. 2192 and S. 908 would also expand the menu of available sanctions against violators. H.R. 1208 would further restrict trade with Iran. There has also been movement on the part of some U.S. states to divest from firms that do business with Iran, even if such trade is legal, and several bills would protect investment funds from lawsuits for divesting from companies active in Iran. However, some experts see such legislation as angering Europe and thereby reducing European cooperation with the United States on Iran, or as potentially backfiring by strengthening the political control exercised by Iran‘s leaders. Chapter 3 - Pakistan‘s nuclear arsenal consists of approximately 60 nuclear warheads, although it could be larger. Islamabad is producing fissile material, adding to related production facilities, and deploying additional delivery vehicles. These steps will enable Pakistan to undertake both quantitative and qualitative improvements to its nuclear arsenal. Whether and to what extent Pakistan‘s current expansion of its nuclear weapons-related facilities is a response to the 2008 U.S.-India nuclear cooperation agreement is unclear. Islamabad does not have a public, detailed nuclear doctrine, but its ―minimum credible deterrent‖ is widely regarded as primarily a deterrent to Indian military action. Pakistan has in recent years taken a number of steps to increase international confidence in the security of its nuclear arsenal. In addition to dramatically overhauling nuclear command and control structures since September 11, 2001, Islamabad has implemented new personnel security programs. Moreover, Pakistani and some U.S. officials argue that, since the 2004 revelations about a procurement network run by former Pakistani nuclear official A.Q. Khan, Islamabad has taken a number of steps to improve its nuclear security and to prevent further proliferation of nuclear-related technologies and materials. A number of important initiatives, such as strengthened export control laws, improved personnel security,

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Preface

ix

and international nuclear security cooperation programs have improved Pakistan‘s security situation in recent years. Instability in Pakistan has called the extent and durability of these reforms into question. Some observers fear radical takeover of a government that possesses a nuclear bomb, or proliferation by radical sympathizers within Pakistan‘s nuclear complex in case of a breakdown of controls. While U.S. and Pakistani officials continue to express confidence in controls over Pakistan‘s nuclear weapons, continued instability in the country could impact these safeguards. Chapter 4 - Although Iran claims that its nuclear program is exclusively for peaceful purposes, it has generated considerable concern that Tehran is pursuing a nuclear weapons program. Indeed, the UN Security Council has responded to Iran‘s refusal to suspend work on its uranium enrichment and heavy-water nuclear reactor programs by adopting several resolutions which imposed sanctions on Tehran. Despite this pressure, Iran continues to enrich uranium, install and operate additional centrifuges, and conduct research on new types of centrifuges. Tehran has also continued to produce centrifuge feedstock, as well as work on its heavy-water reactor and associated facilities. Whether Iran is pursuing a nuclear weapons program is, however, unknown. A National Intelligence Estimate made public in December 2007 assessed that Tehran ―halted its nuclear weapons program,‖ defined as ―Iran‘s nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichment-related work,‖ in 2003. The estimate, however, also assessed that Tehran is ―keeping open the option to develop nuclear weapons‖ and that any decision to end a nuclear weapons program is ―inherently reversible.‖ Intelligence community officials have reaffirmed this judgment on several occasions. Iranian efforts to produce fissile material for nuclear weapons by using its known nuclear facilities would almost certainly be detected by the IAEA. Although Iran has cooperated with the International Atomic Energy Agency (IAEA) to an extent, the agency says that Tehran has not gone far enough to alleviate all of the IAEA‘s concerns about Iran‘s enrichment and heavy-water reactor programs. The IAEA continues to investigate the program, particularly evidence that Tehran may have conducted procurement activities and research directly applicable to nuclear weapons development. Chapter 5 - The United Arab Emirates (UAE) has embarked on a program to build civilian nuclear power plants and is seeking cooperation and technical assistance from the United States and others. During 2008 and early 2009, the Bush Administration and the UAE government negotiated and signed a memorandum of understanding and a proposed bilateral agreement on peaceful nuclear cooperation pursuant to Section 123 of the Atomic Energy Act (AEA) of 1954. Then-U.S. Secretary of State Condoleezza Rice signed the proposed agreement on peaceful nuclear cooperation with the UAE January 15, 2009. Deputy Secretary of State James Steinberg signed a new version of the agreement May 21; the Obama Administration submitted the proposed agreement to Congress the same day. Under the AEA, Congress has the opportunity to review such a proposed agreement for 90 days of continuous session, after which the agreement becomes effective unless, during that time, Congress adopts a joint resolution disapproving the agreement and the resolution becomes law. According to the Office of the Parliamentarian of the House of Representatives, the 90 days of continuous session for the proposed U.S.-UAE agreement expired October 17,

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2009. The UAE cabinet approved the agreement October 26. The two governments need to exchange diplomatic notes in order for the agreement to enter into force. The agreement text states the intent of both governments to cooperate in a number of areas including, but not limited to, the development of the UAE‘s ―civilian nuclear energy use in a manner that contributes to global efforts to prevent nuclear proliferation‖ and, ―the establishment of reliable sources of nuclear fuel for future civilian light water reactors deployed‖ in the UAE. To date, some Members of Congress have welcomed the UAE government‘s stated commitments not to pursue proliferation-sensitive nuclear capabilities, such as uranium enrichment or spent fuel reprocessing. Other Members have signaled their intention to weigh the proposed bilateral agreement in light of parallel and specific concerns about the UAE‘s cooperation with international efforts (such as sanctions) to prevent Iran from developing nuclear weapons and ballistic missiles, as well as the potential proliferation or safety risks inherent to exporting U.S. nuclear technology. In the 111th Congress, legislation (H.R. 364) has been introduced that would require President Obama to certify that the UAE has taken a number of steps to strengthen its export controls and stem illicit trade with Iran before any agreement could come into effect or related U.S. exports of nuclear technology to the UAE could be approved. In 2007, the UAE adopted a stronger export control law, but has yet to issue implementing regulations for the law or to fully staff a national export control body to enforce it. In the interim, export control enforcement functions remain the responsibility of authorities in the UAE‘s individual emirates, in coordination with a new national interagency Committee on Commodities Subject to Import and Export Control, established in April 2009. According to UAE officials, cooperation with the United States has resulted in a number of joint interdiction operations. Chapter 6 - India, which has not signed the Nuclear Nonproliferation Treaty (NPT) and does not have International Atomic Energy Agency safeguards on all nuclear material in peaceful nuclear activities, exploded a ―peaceful‖ nuclear device in 1974, convincing the world of the need for greater restrictions on nuclear trade. The United States created the Nuclear Suppliers Group (NSG) as a direct response to India‘s test, halted nuclear exports to India a few years later, and worked to convince other states to do the same. India tested nuclear weapons again in 1998. However, President Bush announced July 18, 2005, he would ―work to achieve full civil nuclear energy cooperation with India‖ and would ―also seek agreement from Congress to adjust U.S. laws and policies,‖ in the context of a broader, global partnership with India. U.S. nuclear cooperation is governed by the Atomic Energy Act (AEA). P.L. 109-401, which President Bush signed into law on December 18, 2006, provides waivers of several provisions of the AEA (Sections 123 a. (2), 128, and 129). It requires that several steps occur before nuclear cooperation can proceed. On September 10, 2008, President Bush submitted to Congress a written determination that these requirements had been met. That same day, the President submitted the text of the proposed agreement, which had not yet been signed. The President also submitted a written determination (also required by the AEA) ―that the performance of the proposed agreement will promote and will not constitute an unreasonable risk to, the common defense and security.‖ In addition, President Bush submitted several documents, including classified and unclassified versions of a Nuclear Proliferation Assessment Statement, which is required by section 123 of the AEA. The Department of State also submitted a report required by P.L. 109- 401 on various aspects of the agreement.

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On September 27, 2008, the House passed H.R. 7081, which approved the agreement. The Senate Committee on Foreign Relations approved identical legislation, S. 3548, September 23. The Senate passed H.R. 7081 October 1. President Bush signed P.L. 110-369 into law October 8. Secretary of State Condoleezza Rice and India‘s External Affairs Minister Shri Pranab Mukherjee signed the agreement October 10, and it entered into force December 6, 2008. However, several steps remain before U.S. companies can start nuclear trade with India. For example, P.L. 110-369 requires that, before the Nuclear Regulatory Commission can issue licenses for U.S. nuclear exports to India, the President must determine and certify to Congress that New Delhi‘s IAEA safeguards agreement has entered into force and that India‘s declaration of its nuclear facilities to the agency ―is not materially inconsistent with the facilities and schedule‖ described in a separation plan that New Delhi provided to Washington. India‘s safeguards agreement entered into force in May 2009, and New Delhi has filed the declaration with the IAEA. The President, however, has not submitted the required certifications to Congress. Furthermore, U.S. firms will likely be very reluctant to engage in nuclear trade with India if the government does not become party to the Convention on Supplementary Compensation for Nuclear Damage, which has not yet entered into force. India also is reportedly insisting that New Delhi and Washington conclude an agreement on a reprocessing facility in India before New Delhi signs contracts with U.S. nuclear firms.

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In: Nuclear Ambitions and Issues in the Middle East Editor: Nathan E. Cohen

ISBN: 978-1-61668-353-5 © 2010 Nova Science Publishers, Inc.

Chapter 1

IRAN’S NUCLEAR PROGRAM: TEHRAN'S COMPLIANCE WITH INTERNATIONAL OBLIGATIONS



Paul K. Kerr

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SUMMARY In 2002, the International Atomic Energy Agency (IAEA) began investigating allegations that Iran had conducted clandestine nuclear activities. Ultimately, the agency reported that some of these activities had violated Tehran‘s IAEA safeguards agreement. The IAEA has not stated definitively that Iran has pursued nuclear weapons, but has also not yet been able to conclude that the country‘s nuclear program is exclusively for peaceful purposes. The IAEA Board of Governors referred the matter to the U.N. Security Council in February 2006. Since then, the council has adopted five resolutions, the most recent of which (Resolution 1835) was adopted in September 2008. The Security Council has required Iran to cooperate fully with the IAEA‘s investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to its IAEA safeguards agreement. However, an August 2009 report from IAEA Director-General Mohamed ElBaradei to the agency‘s Board of Governors indicated that Tehran has continued to defy the council‘s demands by continuing work on its uranium enrichment program and heavy-water reactor program. Iran has signed, but not ratified, its Additional Protocol. Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran‘s nuclear program. Most of these questions have essentially been resolved, but ElBaradei told the agency‘s board in June 2008 that the agency still has questions regarding ―possible military dimensions to Iran‘s nuclear programme.‖ The IAEA has reported for some time that it has not been able to make progress on these matters.



This is an edited, reformatted and augmented version of a CRS Report for Congress publication dated October 2009.

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14

Paul K. Kerr

This report provides a brief overview of Iran‘s nuclear program and describes the legal basis for the actions taken by the IAEA board and the Security Council. It will be updated as events warrant.

INTRODUCTION

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Iran ratified the nuclear Nonproliferation Treaty (NPT) in 1970. Article III of the treaty requires non-nuclear-weapon states-parties1 to accept comprehensive International Atomic Energy Agency (IAEA) safeguards; Tehran concluded a comprehensive safeguards agreement with the IAEA in 1974.2 In 2002, the agency began investigating allegations that Iran had conducted clandestine nuclear activities; the IAEA ultimately reported that some of these activities had violated Tehran‘s safeguards agreement. The agency has not stated definitively that Iran has pursued nuclear weapons, but has also not yet been able to conclude that the country‘s nuclear program is exclusively for peaceful purposes. The IAEA continues to investigate the program. Following more than three years of investigation, the IAEA Board of Governors referred the matter to the U.N. Security Council in February 2006. Since then, the council has adopted five resolutions requiring Iran to take steps to alleviate international concerns about its nuclear program. This report provides a brief overview of Iran‘s nuclear program and describes the legal basis for the actions taken by the IAEA board and the Security Council. For more detailed information about Iran‘s nuclear program, see CRS Report RL3 4544, Iran’s Nuclear Program: Status, by Paul K. Kerr. For more information about the state of international diplomacy with Iran, see CRS Report RL3 2048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.

Background Iran‘s construction of a gas centrifuge-based uranium enrichment facility is currently the main source of proliferation concern. Gas centrifuges enrich uranium by spinning uranium hexafluoride gas at high speeds to increase the concentration of the uranium-235 isotope. Such centrifuges can produce both low-enriched uranium (LEU), which can be used in nuclear power reactors, and highly enriched uranium (HEU), which is one of the two types of fissile material used in nuclear weapons. HEU can also be used as fuel in certain types of nuclear reactors. Iran also has a uranium-conversion facility, which converts uranium oxide into several compounds, including uranium hexafluoride. Tehran claims that it wants to produce LEU for its current and future power reactors. Iran‘s construction of a reactor moderated by heavy water has also been a source of concern. Although Tehran says that the reactor, which Iran is building at Arak, is intended for the production of medical isotopes, it is a proliferation concern because the reactor‘s spent fuel will contain plutonium well-suited for use in nuclear weapons. In order to be used in nuclear weapons, however, plutonium must be separated from the spent fuel—a procedure called ―reprocessing.‖ Iran has said that it will not engage in reprocessing.

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Iran‘s Nuclear Program: Tehran's Compliance with International Obligations

15

Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran‘s nuclear program.3 Most of these questions, which had created suspicions that Iran had been pursuing a nuclear weapons program, have essentially been resolved. IAEA Director-General Mohamed ElBaradei, however, told the IAEA board June 2, 2008, that there is ―one remaining major [unresolved] issue,‖ which concerns questions regarding ―possible military dimensions to Iran‘s nuclear programme.‖ An August 28, 2009, report4 from ElBaradei to the Security Council and the IAEA board indicates that the agency has not made any substantive progress on these matters. Tehran has questioned the authenticity of some of the evidence underlying the agency‘s concerns and maintains that it has not done any work on nuclear weapons. Iran has also expressed concern to the IAEA that resolving some of these issues would require agency inspectors to have ―access to sensitive information related to its conventional military and missile related activities.‖ The IAEA, according to a September 2008 report from ElBaradei, has stated its willingness to discuss with Iran

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modalities that could enable Iran to demonstrate credibly that the activities referred to in the documentation are not nuclear related, as Iran asserts, while protecting sensitive information related to its conventional military activities.5

Indeed, the agency says that it has made several specific proposals, but Tehran has not yet provided the requested information. The most recent Security Council resolution (1835), adopted September 27, 2008, requires Iran to cooperate fully with the IAEA‘s investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to its IAEA safeguards agreement.6 However, ElBaradei‘s August report indicated that Tehran has continued to defy the council‘s demands by continuing work on its uranium enrichment program and heavy-water reactor program. Iran disclosed to the IAEA in September 2009 that it has also been constructing a gascentrifuge uranium enrichment facility near the city of Qom. Iranian officials have repeatedly stated that Iran will not suspend its enrichment program. Tehran has signed, but not ratified, its Additional Protocol.

Iran and the IAEA As noted above, Iran is a party to the NPT and has concluded a comprehensive safeguards agreement. According to the IAEA, safeguards pursuant to such agreements are applied to verify a State‘s compliance with its undertaking to accept safeguards on all nuclear material in all its peaceful nuclear activities and to verify that such material is not diverted to nuclear weapons or other nuclear explosive devices.7

Comprehensive safeguards are designed to enable the IAEA to detect the diversion of nuclear material from peaceful purposes to nuclear weapons uses, as well as to detect undeclared nuclear activities and material.8 Safeguards include agency inspections and monitoring of declared nuclear facilities.

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The agency‘s inspections and monitoring authority in a particular country are limited to facilities that have been declared by the government. Additional Protocols to IAEA comprehensive safeguards agreements increase the agency‘s ability to investigate clandestine nuclear facilities and activities by increasing the IAEA‘s authority to inspect certain nuclearrelated facilities and demand information from member states.9 Iran signed such a protocol in December 2003 and agreed to implement the agreement pending ratification. Tehran stopped adhering to its Additional Protocol in 2006. The IAEA‘s authority to investigate nuclear-weapons-related activity is limited. ElBaradei explained in a 2005 interview that ―we don‘t have an all-encompassing mandate to look for every computer study on weaponization. Our mandate is to make sure that all nuclear materials in a country are declared to us.‖10 Similarly, a February 2006 report from ElBaradei to the IAEA board stated that ―absent some nexus to nuclear material the Agency‘s legal authority to pursue the verification of possible nuclear weapons related activity is limited.‖11 The current public controversy over Iran‘s nuclear program began in August 2002, when the National Council of Resistance on Iran (NCRI), an Iranian exile group, revealed information during a press conference (some of which later proved to be accurate) that Tehran had built nuclear-related facilities that it had not revealed to the IAEA. The United States had been aware of at least some of these activities, according to knowledgeable former officials.12 Prior to the NCRI‘s revelations, the IAEA had expressed concerns that Iran had not been providing the agency with all relevant information about its nuclear programs, but had never found the country in violation of its safeguards agreement. In fall 2002, the IAEA began to investigate Iran‘s nuclear activities at the sites named by the NCRI; inspectors visited the sites the following February. Adopting its first resolution (GOV/2003/69)13 on the matter in September 2003, the IAEA board called on Tehran to increase its cooperation with the agency‘s investigation, suspend its uranium enrichment activities, and ―unconditionally sign, ratify and fully implement‖ an Additional Protocol. In October 2003, Iran concluded a voluntary agreement with France, Germany, and the United Kingdom, collectively known as the ―E3,‖ to suspend its enrichment activities, sign and implement an Additional Protocol to its IAEA safeguards agreement, and comply fully with the IAEA‘s investigation.14 As a result, the agency‘s board decided to refrain from referring the matter to the U.N. Security Council. As noted above, Tehran signed this Additional Protocol in December 2003, but has never ratified it. Ultimately, the IAEA‘s investigation, as well as information Iran provided after the October 2003 agreement, revealed that Iran had engaged in a variety of clandestine nuclearrelated activities, some of which violated the country‘s safeguards agreement (see Appendix A). After October 2003, Iran continued some of its enrichment-related activities, but Tehran and the E3 agreed in November 2004 to a more detailed suspension agreement.15 However, Iran resumed uranium conversion in August 2005 under the leadership of President Mahmoud Ahmadinejad, who had been elected two months earlier. On September 24, 2005, the IAEA Board of Governors adopted a resolution (GOV/2005/77)16 that, for the first time, found Iran to be in noncompliance with its IAEA safeguards agreement. The board, however, did not refer Iran to the Security Council, choosing instead to give Tehran additional time to comply with the board‘s demands. The resolution urged Iran:

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Iran‘s Nuclear Program: Tehran's Compliance with International Obligations 

   

17

To implement transparency measures ... [including] access to individuals, documentation relating to procurement, dual use equipment, certain military owned workshops and research and development locations; To re-establish full and sustained suspension of all enrichment-related activity; To reconsider the construction of [the] research reactor moderated by heavy water; To ratify promptly and implement in full the Additional Protocol; [T]o continue to act in accordance with the provisions of the Additional Protocol.

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No international legal obligations required Tehran to take these steps. But ElBaradei‘s September 2008 report asserted that, without Iranian implementation of such ―transparency measures,‖ the IAEA ―will not be in a position to progress in its verification of the absence of undeclared nuclear material and activities in Iran.‖

Potential Noncompliance since September 2005 Iran further scaled back its cooperation with the IAEA in March 2007, when the government told the IAEA that it would stop complying with a portion of the subsidiary arrangements for its IAEA safeguards agreement. 17 That provision, to which Iran agreed in 2003, requires Tehran to provide design information for new nuclear facilities ―as soon as the decision to construct, or to authorize construction, of such a facility has been taken, whichever is earlier.‖ Since March 2007, Iran has argued that it is only obligated to adhere to the previous notification provisions of its subsidiary arrangement, which required Tehran to provide design information for a new facility 180 days before introducing nuclear material into it. Based on its March 2007 decision, Tehran has refused to provide the IAEA with design information for a reactor that, according to Iranian officials, Iran intends to construct at Darkhovin. Similarly, Tehran has not provided updated design information for the heavy water reactor under construction at Arak. Iran has also argued, again based on its March 2007 decision, that its failure to notify the IAEA before September 2009 that it has been constructing a gas- centrifuge uranium enrichment facility near the city of Qom is consistent with Tehran‘s safeguards obligations. Even if this were true (which, as explained below, it apparently is not), Iranian and U.S. officials have stated that Iran began work on the facility before March 2007. Both the 2007 decision, which the IAEA has asked Iran to ―reconsider,‖ and Tehran‘s refusal to provide the design information appear to be inconsistent with the government‘s safeguards obligations. Although Article 39 of Iran‘s safeguards agreement states that the subsidiary arrangements ―may be extended or changed by agreement between‖ Iran and the IAEA, the agreement does not provide for a unilateral modification or suspension of any portion of those arrangements.18 A March 2009 statement19 by the IAEA legal adviser explained that Tehran‘s failure to provide design information for the reactors is ―inconsistent with‖ Iran‘s obligations under its subsidiary arrangements. The adviser, however, added that ―it is difficult to conclude that‖ Tehran‘s refusal to provide the information ―in itself constitutes non-compliance with, or a breach of‖ Iran‘s safeguards agreement. Until recently, Iran had also refused, on the basis of its March 2007 decision, to allow IAEA inspectors to verify design information for the Arak reactor—another action that appeared to be inconsistent with Tehran‘s safeguards agreement. Article 48 of that agreement

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states that the IAEA ―may send inspectors to facilities to verify the design information provided to the Agency‖; in fact, the agency has a ―continuing right‖ to do so, according to a November 2008 report from ElBaradei.20 Moreover, the legal adviser‘s statement characterized Iran‘s ongoing refusal to allow IAEA inspectors to verify the Arak reactor‘s design information as ―inconsistent with‖ Tehran‘s obligations under its safeguards agreement.21 However, IAEA inspectors visited the reactor facility in August 2009 to verify design information, according to ElBaradei‘s report issued the same month. The IAEA board has neither formally found that any of the Iranian actions described above are in noncompliance with Tehran‘s safeguards agreement, nor has the board referred these issues to the UN Security Council.

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Iran and the U.N. Security Council Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. In response, the IAEA board adopted a resolution (GOV/2006/14)22 February 4, 2006, referring the matter to the Security Council and reiterating its call for Iran to take the measures specified in the September resolution. Two days later, Tehran announced that it would stop implementing its Additional Protocol. On March 29, 2006, the U.N. Security Council President issued a statement, which was not legally binding, that called on Iran to ―take the steps required‖ by the February IAEA board resolution. The council subsequently adopted five resolutions concerning Iran‘s nuclear program: 1696 (July 2006), 1737 (December 2006), 1747 (March 2007), 1803 (March 2008), and 1835 (September 2008). The second, third, and fourth resolutions imposed a variety of restrictions on Iran. Resolution 1696 was the first to place legally binding Security Council requirements on Iran with respect to its nuclear program. That resolution made mandatory the IAEA— demanded suspension and called on Tehran to implement the transparency measures called for by the IAEA board‘s February 2006 resolution. Resolution 1737 reiterated these requirements but expanded the suspension‘s scope to include ―work on all heavy waterrelated projects.‖ It is worth noting that the Security Council has acknowledged (in Resolution 1803, for example) Iran‘s rights under Article IV of the NPT, which states that parties to the treaty have ―the inalienable right ... to develop research, production and use of nuclear energy for peaceful Purposes.‖23

AUTHORITY FOR IAEA AND U.N. SECURITY COUNCIL ACTIONS The legal authority for the actions taken by the IAEA Board of Governors and the U.N. Security Council is found in both the IAEA Statute and the U.N. Charter. The following sections discuss the relevant portions of those documents.

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IAEA Statute Two sections of the IAEA Statute explain what the agency should do if an IAEA member state is found to be in noncompliance with its safeguards agreement.24 Article III B. 4. of the statute states that the IAEA is to submit annual reports to the U.N. General Assembly and, ―when appropriate,‖ to the U.N. Security Council. If ―there should arise questions that are within the competence of the Security Council,‖ the article adds, the IAEA ―shall notify the Security Council, as the organ bearing the main responsibility for the maintenance of international peace and security.‖ Additionally, Article XII C. states that IAEA inspectors are to report non-compliance issues to the agency‘s Director-General, who is to report the matter to the IAEA Board of Governors. The board is then to ―call upon the recipient State or States to remedy forthwith any non-compliance which it finds to have occurred,‖ as well as ―report the non-compliance to all members and to the Security Council and General Assembly of the United Nations.‖ In the case of Iran, the September 24, 2005 IAEA board resolution (GOV/2005/77) stated that the board found that Iran‘s many failures and breaches of its obligations to comply with its NPT Safeguards Agreement, as detailed in GOV/2003/75 [a November 2003 report from ElBaradei], constitute non compliance in the context of Article XII.C of the Agency‘s Statute;

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According to the resolution, the board also found that the history of concealment of Iran‘s nuclear activities referred to in the Director General‘s report [GOV/2003/75], the nature of these activities, issues brought to light in the course of the Agency‘s verification of declarations made by Iran since September 2002 and the resulting absence of confidence that Iran‘s nuclear programme is exclusively for peaceful purposes have given rise to questions that are within the competence of the Security Council, as the organ bearing the main responsibility for the maintenance of international peace and security.

ElBaradei issued the report cited by the resolution, GOV/2003/75, in November 2003.25 It described a variety of Iranian nuclear activities, which are detailed in Appendix A, that violated Tehran‘s safeguards agreement. ElBaradei has since reported that Iran has taken corrective measures to address these safeguards breaches. As noted above, the 2005 resolution called on Iran to take a variety of actions that Tehran was not legally required to implement.

U.N. Charter and the Security Council Several articles of the U.N. Charter, which is a treaty, describe the Security Council‘s authority to impose requirements and sanctions on Iran.26 Article 24 confers on the council ―primary responsibility for the maintenance of international peace and security.‖ The article also states that the ―specific powers granted to the Security Council for the discharge of these duties are laid down‖ in several chapters of the charter, including Chapter VII, which

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describes the actions that the council may take in response to ―threats to the peace, breaches of the peace, and acts of aggression.‖ Chapter VII of the charter contains three articles relevant to the Iran case. Security Council resolutions that made mandatory the IAEA‘s demands concerning Iran‘s nuclear program invoked Chapter VII. Article 39 of that chapter states that the council shall determine the existence of any threat to the peace, breach of the peace, or act of aggression and shall make recommendations, or decide what measures shall be taken in accordance with Articles 41 and 42, to maintain or restore international peace and security.

Resolution 1696 invoked Article 40 of Chapter VII ―in order to make mandatory the suspension required by the IAEA.‖ As noted earlier, that resolution did not impose any sanctions on Iran. Article 40 states that the Security Council may, before making the recommendations or deciding upon the measures provided for in Article 39 [of Chapter VII], call upon the parties concerned to comply with such provisional measures as it deems necessary or desirable.

Resolutions 1737, 1747, and 1803, which did impose sanctions, invoked Article 41 of Chapter VII. According to Article 41, the Security Council

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may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. These may include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations.

As noted above, Security Council resolution 1835 did not impose new sanctions, but reaffirmed the previous resolutions and called on Iran to comply with them. The sanctions imposed by those resolutions remain in place. The five permanent members of the council, along with Germany, are continuing to discuss the matter. It is worth noting that Article 25 of the U.N. Charter obligates U.N. members ―to accept and carry out the decisions of the Security Council.‖

HAS IRAN VIOLATED THE NPT?27 Whether Iran has violated the NPT is unclear. The treaty does not contain a mechanism for determining that a state-party has violated its obligations. Moreover, there does not appear to be a formal procedure for determining such violations. An NPT Review Conference would, however, be one venue for NPT states-parties to make such a determination. The U.N. Security Council has never declared Iran to be in violation of the NPT; neither the council nor the U.N. General Assembly has a responsibility to adjudicate treaty violations. However, the lack of a ruling by the council on Iran‘s compliance with the NPT has apparently had little practical effect because, as noted above, the council has taken action in

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response to the IAEA Board of Governors‘ determination that Iran has violated its safeguards agreement. Iran‘s violations of its safeguards agreement appear to constitute violations of Article III, which requires NPT non-nuclear-weapon states-parties to adhere to their safeguards agreements. Tehran may also have violated provisions of Article II which state that nonnuclear-weapon states-parties shall not ―manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices‖ or ―seek or receive any assistance in the manufacture of nuclear weapons or other nuclear explosive devices.‖ As previously noted, the IAEA is continuing to investigate evidence of what ElBaradei described in June 2008 as ―possible military dimensions to Iran‘s nuclear programme.‖ Such activities may indicate that Tehran has violated both Article II provisions described above, but the IAEA has never reported that Iran has attempted to develop nuclear weapons. Despite the lack of such an IAEA conclusion, a 2005 State Department report argued that the country had violated Article II of the NPT:

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The breadth of Iran‘s nuclear development efforts, the secrecy and deceptions with which they have been conducted for nearly 20 years, its redundant and surreptitious procurement channels, Iran‘s persistent failure to comply with its obligations to report to the IAEA and to apply safeguards to such activities, and the lack of a reasonable economic justification for this program leads us to conclude that Iran is pursuing an effort to manufacture nuclear weapons, and has sought and received assistance in this effort in violation of Article II of the NPT.28

The report also stated that Iran‘s ―weapons program combines elements‖ of Tehran‘s declared nuclear activities, as well as suspected ―undeclared fuel cycle and other activities that may exist, including those that may be run solely be the military.‖ The State Department‘s reasoning appears to be based on an interpretation of the NPT which holds that a wide scope of nuclear activities could constitute violations of Article II. The 2005 report states that assessments regarding Article II compliance ―must look at the totality of the facts, including judgments as to‖ a state-party‘s ―purpose in undertaking the nuclear activities in question.‖ The report also includes a list of activities which could constitute such noncompliance.29 The 2005 State Department report cites testimony from then-Arms Control and Disarmament Agency Director William Foster during a 1968 Senate Foreign Relations Committee hearing.30 Foster stated that ―facts indicating that the purpose of a particular activity was the acquisition of a nuclear explosive device would tend to show noncompliance‖ with Article II. He gave two examples: ―the construction of an experimental or prototype nuclear explosive device‖ and ―the production of components which could only have relevance‖ to such a device. However, Foster also noted that a variety of other activities could also violate Article II, adding that the United States believed it impossible ―to formulate a comprehensive definition or interpretation.‖ A November 2007 National Intelligence Estimate stated that ―until fall 2003, Iranian military entities were working under government direction to develop nuclear weapons.‖31 This past program could be a violation of Article II, although the estimate does not provide any detail about the program.

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It is worth noting that the State Department‘s arguments appear to rely heavily on the notion that a state‘s apparent intentions underlying certain nuclear-related activities can be used to determine violations of Article II. This interpretation is not shared by all experts.32

APPENDIX A. IRANIAN NONCOMPLIANCE WITH ITS IAEA SAFEGUARDS AGREEMENT The November 2003 report (GOV/2003/75) from IAEA Director-General ElBaradei to the agency‘s Board of Governors details what the September 2005 board resolution described as ―Iran‘s many failures and breaches of its obligations to comply with its safeguards agreement.‖ The report stated that Iran has failed in a number of instances over an extended period of time to meet its obligations under its Safeguards Agreement with respect to the reporting of nuclear material and its processing and use, as well as the declaration of facilities where such material has been processed and stored.

The report detailed some of these failures and referenced other failures described in two earlier reports (GOV/2003/40 and GOV/2003/63) from ElBaradei to the IAEA board. 33 According to GOV/2003/40, Iran failed to declare the following activities to the agency: 

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

The importation of natural uranium, and its subsequent transfer for further processing. The processing and use of the imported natural uranium, including the production and loss of nuclear material, and the production and transfer of resulting waste.

Additionally, Iran failed to   

declare the facilities where nuclear material (including the waste) was received, stored and processed, provide in a timely manner updated design information for a research reactor located in Tehran, as well as provide in a timely manner information on two waste storage sites.

GOV/2003/63 stated that Iran failed to report uranium conversion experiments to the IAEA. According to GOV/2003/75, Iran failed to report the following activities to the IAEA:  

The use of imported natural uranium hexafluoride for the testing of centrifuges, as well as the subsequent production of enriched and depleted uranium. The importation of natural uranium metal and its subsequent transfer for use in laser enrichment experiments, including the production of enriched uranium, the loss of nuclear material during these operations, and the production and transfer of resulting waste.

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The production of a variety of nuclear compounds from several different imported nuclear materials, and the production and transfer of resulting wastes. The production of uranium targets and their irradiation in the Tehran Research Reactor, the subsequent processing of those targets (including the separation of plutonium), the production and transfer of resulting waste, and the storage of unprocessed irradiated targets.

Iran also failed to provide the agency with design information for a variety of nuclearrelated facilities, according to the report. These included the following:    

A centrifuge testing facility. Two laser laboratories and locations where resulting wastes were processed. Facilities involved in the production of a variety of nuclear compounds. The Tehran Research Reactor (with respect to the irradiation of uranium targets), the hot cell facility where the plutonium separation took place, as well as the relevant waste handling facility.

Additionally, the report cited Iran‘s ―failure on many occasions to co-operate to facilitate the implementation of safeguards, through concealment‖ of its nuclear activities.

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APPENDIX B. EXTENDED REMARKS BY WILLIAM FOSTER REGARDING POSSIBLE NPT ARTICLE II VIOLATIONS On July 10, 1968, then-Arms Control and Disarmament Agency Director William Foster testified before the Senate Foreign Relations Committee about the NPT. In response to a question regarding the type of nuclear activities prohibited by Article II of the treaty, Foster supplied the following statement: Extension of Remarks by Mr. Foster in Response to Question Regarding Nuclear Explosive Devices The treaty articles in question are Article II, in which non-nuclear-weapon parties undertake ‗not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices,‘ and Article IV, which provides that nothing in the Treaty is to be interpreted as affecting the right of all Parties to the Treaty ‗to develop research, production and use of nuclear energy for peaceful purposes...in conformity with Articles I and II of this Treaty.‘ In the course of the negotiation of the Treaty, United States representatives were asked their views on what would constitute the ‗manufacture‘ of a nuclear weapon or other nuclear explosive device under Article II of the draft treaty. Our reply was as follows: ‗While the general intent of this provision seems clear, and its application to cases such as those discussed below should present little difficulty, the United States believe [sic] it is not possible at this time to formulate a comprehensive definition or interpretation. There are many hypothetical situations which might be imagined and it is doubtful that any general definition or interpretation, unrelated to specific fact situations could satisfactorily deal with all such situations.

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Paul K. Kerr ‗Some general observations can be made with respect to the question of whether or not a specific activity constitutes prohibited manufacture under the proposed treaty. For example, facts indicating that the purpose of a particular activity was the acquisition of a nuclear explosive device would tend to show non-compliance. (Thus, the construction of an experimental or prototype nuclear explosive device would be covered by the term ‗manufacture‘ as would be the production of components which could only have relevance to a nuclear explosive device.) Again, while the placing of a particular activity under safeguards would not, in and of itself, settle the question of whether that activity was in compliance with the treaty, it would of course be helpful in allaying any suspicion of non-compliance. ‗It may be useful to point out, for illustrative purposes, several activities which the United States would not consider per se to be violations of the prohibitions in Article II. Neither uranium enrichment nor the stockpiling of fissionable material in connection with a peaceful program would violate Article II so long as these activities were safeguarded under Article III. Also clearly permitted would be the development, under safeguards, of plutonium fueled power reactors, including research on the properties of metallic plutonium, nor would Article II interfere with the development or use of fast breeder reactors under safeguards.‘

End Notes

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1

Under the NPT, the five nuclear-weapon states are China, France, Russia, the United Kingdom, and the United States. All other parties are non-nuclear-weapon states. 2 INFCIRC/214, available at http://www.iaea.org/Publications/Documents/Infcircs/Others/infcirc214.pdf. Nonnuclear-weapons states-parties to the nuclear Nonproliferation Treaty are obligated to conclude comprehensive safeguards agreements with the International Atomic Energy Agency. 3 The text is available at http://www.iaea.org/Publications/Documents/Infcircs/2007/infcirc711.pdf. 4 GOV/2009/55, available at http://www.iaea.org/Publications/Documents/Board/2009/gov2009-55.pdf. 5 GOV/2008/38, available at http://www.iaea.org/Publications/Documents/Board/2008/gov2008-38.pdf. 6 Iran is also constructing a plant for the production of heavy water. 7 IAEA Safeguards Glossary, op cit. Comprehensive safeguards agreements are based on a model described in INFCIRC 153, available at http://www.iaea.org/Publications/Documents/Infcircs/Others/infcirc153.pdf. 8 Ibid. 9 Additional Protocols for an individual IAEA member state are based on the agency‘s Model Additional Protocol (INFCIRC/540), available at http://www.iaea.org/Publications/Documents/Infcircs/1997/infcirc540c.pdf. 10 ―Tackling the Nuclear Dilemma: An Interview with IAEA Director-General Mohamed ElBaradei,‖ February 4, 2005, available at http://www.armscontrol.org/act/2005_03/ElBaradei. 11 GOV/2006/15, available at http://www.iaea.org/Publications/Documents/Board/2006/gov2006-15.pdf. 12 Gary Samore, Former Senior Director for Nonproliferation and Export Controls on the National Security Council, personal communication June 5, 2008; Director of Central Intelligence George J. Tenet, ―DCI Remarks on Iraq‘s WMD Programs,‖ February 5, 2004, available at https://www.cia.gov/news-information/speechestestimony/2004/ tenet_georgetownspeech_02052004.html. 13 Available at http://www.iaea.org/Publications/Documents/Board/2003/gov2003-69.pdf. 14 The text of the agreement is available at http://www.iaea.org/NewsCenter/Focus/IaeaIran/ statement _iran21 102003.shtml. 15 The text of the agreement is available at http://www.iaea.org/Publications/Documents/Infcircs/ 2004/infcirc637.pdf. 16 Available at http://www.iaea.org/Publications/Documents/Board/2005/gov2005-77.pdf. 17 According to the 2001 IAEA Safeguards Glossary, subsidiary arrangements describe the ―technical and administrative procedures for specifying how the provisions laid down in a safeguards agreement are to be applied.‖ 18 See also GOV/2007/22, available at http://www.iaea.org/Publications/Documents/Board/2007/gov2007-22.pdf. 19 Available at http://www.armscontrolwonk.com/file_download/162/Legal_Adviser_Iran.pdf. 20 GOV/2008/59. 21 Iran stated in an April 2007 letter to the IAEA that, given Tehran‘s March 2007 decision regarding the subsidiary arrangements to its safeguards agreement, such visits were unjustified. 22 Available at http://www.iaea.org/Publications/Documents/Board/2006/gov2006-14.pdf. 23 The treaty text is available at http://www.iaea.org/Publications/Documents/Infcircs/Others/infcirc140.pdf.

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The text of the IAEA Statute is available at http://www.iaea.org/About/statute_text.html. Available at http://www.iaea.org/Publications/Documents/Board/2003/gov2003-75.pdf. 26 The text of the charter is available at http://www.un.org/aboutun/charter/. 27 Portions of this section are based on interviews with U.N. and State Department officials. 28 Adherence to and Compliance with Arms Control, Nonproliferation and Disarmament Agreements and Commitments, Department of State, August 2005, available at http://www.state.gov/ documents/organization/52113.pdf. 29 According to the report, such activities can include (1) the presence of undeclared nuclear facilities; (2) procurement patterns inconsistent with a civil nuclear program (e.g., clandestine procurement networks, possibly including the use of front companies, false end-use information, and fraudulent documentation); (3) security measures beyond what would be appropriate for peaceful, civil nuclear installations; (4) a pattern of Article III safeguards violations suggestive not of mere mistake or incompetence, but of willful violation and/or systematic deception and denial efforts aimed at concealing nuclear activities from the IAEA; and (5) a nuclear program with little (or no) coherence for peaceful purposes, but great coherence for weapons purposes. 30 Nonproliferation Treaty, Senate Committee on Foreign Relations, Joint Committee on Atomic Energy [Part 1] July 10-12, 17, 1968; Session 90-2 (1968). The complete statement regarding Article II violations is in Appendix B. 31 Available at http://www.dni.gov/press_releases/20071203_release.pdf. 32 Personal communication with Andreas Persbo, Senior Researcher, the Verification Research, Training and Information Centre. 33 Those reports are available at http://www.iaea.org/Publications/Documents/Board/2003/gov2003-40.pdf and http://www.iaea.org/Publications/Documents/Board/2003/gov2003-63.pdf.

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25

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In: Nuclear Ambitions and Issues in the Middle East Editor: Nathan E. Cohen

ISBN: 978-1-61668-353-5 © 2010 Nova Science Publishers, Inc.

Chapter 2

IRAN SANCTIONS



Kenneth Katzman

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SUMMARY Iran is subject to a wide range of U.S. sanctions, restricting trade with, investment, and U.S. foreign aid to Iran, and requiring the United States to vote against international lending to Iran. Several laws and Executive Orders authorize the imposition of U.S. penalties against foreign companies that do business with Iran, as part of an effort to persuade foreign firms to choose between the Iranian market and the much larger U.S. market. Most notable among these sanctions is a ban, imposed in 1995, on U.S. trade with and investment in Iran. That ban has since been modified slightly to allow for some bilateral trade in luxury and humanitarianrelated goods. Foreign subsidiaries of U.S. firms remain generally exempt from the trade ban since they are under the laws of the countries where they are incorporated. Since 1995, several U.S. laws and regulations that seek to pressure Iran‘s economy, curb Iran‘s support for militant groups, and curtail supplies to Iran of advanced technology have been enacted. Since 2006, the United Nations Security Council has imposed some sanctions primarily attempting to curtail supply to Iran of weapons-related technology but also sanctioning some Iranian banks. U.S. officials have identified Iran‘s energy sector as a key Iranian vulnerability because Iran‘s government revenues are approximately 80% dependent on oil revenues and in need of substantial foreign investment. A U.S. effort to curb international energy investment in Iran began in 1996 with the Iran Sanctions Act (ISA), but no firms have been sanctioned under it and the precise effects of ISA—as distinct from other factors affecting international firms‘ decisions on whether to invest in Iran—have been unclear. While international pressure on Iran to curb its nuclear program has increased the hesitation of many major foreign firms to invest in Iran‘s energy sector, hindering Iran‘s efforts to expand oil production beyond 4.1 million barrels per day, some firms continue to see opportunity in Iran. This particularly 

This is an edited, reformatted and augmented version of a CRS Report for Congress publication dated October 2009.

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appears to be the case for companies in Asia that appear eager to fill the void left by major European and American firms and to line up steady supplies of Iranian oil and natural gas. Some in Congress express concern about the reticence of U.S. allies, of Russia, and of China, to impose U.N. sanctions that would target Iran‘s civilian economy. In an attempt to strengthen U.S. leverage with its allies to back such international sanctions, several bills in the 111th Congress would add U.S. sanctions on Iran. For example, H.R. 2194, H.R. 1985, H.R. 1208, and S. 908 would include as ISA violations: selling refined gasoline to Iran; providing shipping insurance or other services to deliver gasoline to Iran; or supplying equipment to or performing the construction of oil refineries in Iran. H.R. 2192 and S. 908 would also expand the menu of available sanctions against violators. H.R. 1208 would further restrict trade with Iran. There has also been movement on the part of some U.S. states to divest from firms that do business with Iran, even if such trade is legal, and several bills would protect investment funds from lawsuits for divesting from companies active in Iran. However, some experts see such legislation as angering Europe and thereby reducing European cooperation with the United States on Iran, or as potentially backfiring by strengthening the political control exercised by Iran‘s leaders. For more on Iran, see CRS Report RL3 2048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.

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OVERVIEW This report analyzes various U.S. sanctions in place against Iran, and their relationship to each other as well as to U.N. sanctions imposed since 2006 because of Iran‘s continued nuclear program development. A particular focus of this report is the Iran Sanctions Act (ISA), which has been the focus of differences of opinion between the United States and its European allies. Some of the congressional proposals, over the past few years, to expand ISA‘s application have also been the basis of discussion between the United States and other countries (―P5+1‖ multilateral working group on Iran—United States, France, Britain, Russia, China, plus Germany)—about possible new U.N. sanctions against Iran‘s energy sector. On the other hand, some tentative agreements reached during October 1, 2009, talks between Iran and the P5+1—agreements that might ensure that Iran‘s nuclear program remains for civilian uses only—appear to have forestalled any immediate P5+1 move to add international sanctions against Iran.

The Iran Sanctions Act (ISA) The Iran Sanctions Act (ISA) is one among many U.S. sanctions in place against Iran. However, it has attracted substantial attention because it authorizes penalties against foreign firms, and because many recent bills have proposed amending the Act to curtail additional types of activity, such as selling gasoline to Iran or associated shipping services. The parent countries of those firms have tended to object to sanctions such as ISA, even though these countries might share the U.S. goal of containing Iran. American firms are restricted from trading with or investing in Iran under separate U.S. measures.

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Iran Sanctions

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Originally called the Iran-Libya Sanctions Act (ILSA), it was enacted to complement other measures—particularly Executive Order 12959 of May 6, 1995, that banned U.S. trade with and investment in Iran—intended to deny Iran the resources to further its nuclear program and to support terrorist organizations such as Hizbollah, Hamas, and Palestine Islamic Jihad. Iran‘s petroleum sector generates about 20% of Iran‘s GDP, but its onshore oil fields and oil industry infrastructure are aging and need substantial investment. Its large natural gas resources (940 trillion cubic feet, exceeded only by Russia) were undeveloped when ISA was first enacted. Iran has 136.3 billion barrels of proven oil reserves, the third largest after Saudi Arabia and Canada. In 1995 and 1996, U.S. allies did not join the United States in enacting trade sanctions against Iran, and the Clinton Administration and Congress believed that it might be necessary for the United States to try to deter their investment in Iran. The opportunity to do so came in November 1995, when Iran opened its energy sector to foreign investment. To accommodate its ideology to retain control of its national resources, Iran used a ―buy-back‖ investment program in which foreign firms recoup their investments from the proceeds of oil and gas discoveries but do not receive equity. With input from the Administration, on September 8, 1995, Senator Alfonse D‘Amato introduced the ―Iran Foreign Oil Sanctions Act‖ to sanction foreign firms‘ exports to Iran of energy technology. A revised version instead sanctioning investment in Iran‘s energy sector passed the Senate on December 18, 1995 (voice vote). On December 20, 1995, the Senate passed a version applying the legislation to Libya as well, which was refusing to yield for trial the two intelligence agents suspected in the December 21, 1988, bombing of Pan Am 103. The House passed H.R. 3107, on June 19, 1996 (415-0), and then concurred on a slightly different Senate version adopted on July 16, 1996 (unanimous consent). It was signed on August 5, 1996 (P.L. 104-172).

Key Provisions/”Triggers” and Available Sanctions ISA consists of a number of ―triggers‖—activity which, if carried out, would be considered violations of ISA and could cause a firm or entity to be sanctioned in accordance with ISA‘s provisions. ISA provides a number of different sanctions that the President could impose that would harm a foreign firm‘s business opportunities in the United States. ISA does not, and probably could not legally or practically, compel any foreign government to take any specific action against one of its firms. ISA requires the President to sanction companies (entities, persons) that make an ―investment‖ of more than $20 million in one year in Iran‘s energy sector,1 or that sell to Iran weapons of mass destruction (WMD) technology or ―destabilizing numbers and types‖ of advanced conventional weapons.2 ISA is primarily targeting foreign firms, because American firms are already prohibited from investing in Iran under the 1995 trade and investment ban discussed earlier. Once a firm is determined to be a violator, ISA requires the imposition of two of a menu of six sanctions on that firm. The available sanctions the President can select from (Section 6) include (1) denial of Export-Import Bank loans, credits, or credit guarantees for U.S. exports to the sanctioned entity; (2) denial of licenses for the U.S. export of military or militarily useful technology; (3) denial of U.S. bank loans exceeding $10 million in one year; (4) if the entity is a financial institution, a prohibition on its service as a primary dealer in U.S. government bonds; and/or a prohibition on its serving as a repository for U.S. government funds (each counts as one sanction); (5) prohibition on U.S. government procurement from

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the entity; and (6) restriction on imports from the entity, in accordance with the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701).

Waiver and Termination Authority The President has the authority under ISA to waive the sanctions on Iran if he certifies that doing so is important to the U.S. national interest (Section 9(c)). There was also waiver authority in the original version of ISA if the parent country of the violating firm joined a sanctions regime against Iran, but this waiver provision was made inapplicable by subsequent legislation. ISA application to Iran would terminate if Iran is determined by the Administration to have ceased its efforts to acquire WMD and is removed from the U.S. list of state sponsors of terrorism, and no longer ―poses a significant threat‖ to U.S. national security and U.S. allies.3 Application to Libya terminated when the President determined on April 23, 2004, that Libya had fulfilled the requirements of all U.N. resolutions on Pan Am 103. Traditionally reticent to impose economic sanctions, the European Union opposed ISA as an extraterritorial application of U.S. law. In April 1997, the United States and the EU agreed to avoid a trade confrontation in the World Trade Organization (WTO) over it and a separate Cuba sanctions law, (P.L. 104-114). The agreement contributed to a May 18, 1998, decision by the Clinton Administration to waive ISA sanctions (―national interest‖—Section 9(c) waiver) on the first project determined to be in violation—a $2 billion4 contract (September 1997) for Total SA of France and its partners, Gazprom of Russia and Petronas of Malaysia to develop phases 2 and 3 of the 25-phase South Pars gas field. The EU pledged to increase cooperation with the United States on non-proliferation and counter-terrorism, and the Administration indicated future investments by EU firms in Iran would not be sanctioned. ISA was to sunset on August 5, 2001, in a climate of lessening tensions with Iran and Libya. During 1999 and 2000, the Clinton Administration had eased the trade ban on Iran somewhat to try to engage the relatively moderate Iranian President Mohammad Khatemi. In 1999, Libya yielded for trial the Pan Am 103 suspects. However, some maintained that both countries would view its expiration as a concession, and renewal legislation was enacted (P.L. 107-24, August 3, 2001). This law required an Administration report on ISA‘s effectiveness within 24 to 30 months of enactment; that report was submitted to Congress in January 2004 and did not recommend that ISA be repealed. Iran Freedom Support Act Amendments In addition to the amendments to ISA referred to above, P.L. 109-293, the ―Iran Freedom and Support Act‖ (H.R. 6198) amended ISA by: (1) calling for, but not requiring, a 180-day time limit for a violation determination; (2) recommending against U.S. nuclear agreements with countries that supply nuclear technology to Iran; (3) expanding provisions of the USA Patriot Act (P.L. 107- 56) to curb money-laundering for use to further WMD programs; (4) extending ISA until December 31, 2011; and (5) formally dropping Libya and changing the name to the Iran Sanctions Act. Earlier versions of the Iran Freedom and Support Act in the 109th Congress (H.R. 282, S. 333) were viewed as too restrictive of Administration prerogatives. Among the provisions of these bills not ultimately adopted included setting a 90-day time limit for the Administration to determine whether an investment is a violation (there is no time limit in the original law);

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cutting U.S. foreign assistance to countries whose companies violate ISA; and, applying the U.S. trade ban on Iran to foreign subsidiaries of U.S. companies.

Effectiveness and Ongoing Challenges The Bush Administration maintained that, even without actually imposing ISA sanctions, the threat of sanctions—coupled with Iran‘s reputedly difficult negotiating behavior, and compounded by Iran‘s growing isolation because of its nuclear program—slowed Iran‘s energy development. The Obama Administration has not altered any U.S. sanctions on Iran— and it renewed for another year the U.S. trade and investment ban on Iran (Executive Order 12959) in March 2009. However, the Obama Administration‘s overall policy approach contrasts with the Bush Administration approach by actively attempting to engage Iran in negotiations on the nuclear issue, rather than focusing only on increasing sanctions on Iran. That approach was altered slightly in the context of the Iranian dispute over its June 12, 2009, elections in that the Administration supported ―crippling‖ new U.N. sanctions if Iran does not return to multilateral nuclear talks by September 24, 2009. However, Iran‘s agreement to discussions with the P5+1 group on October 1, 2009, and the relatively constructive outcome of those talks, have apparently forestalled near term discussion of additional sanctions. As shown in Table 1 below, several foreign investment agreements have been agreed with Iran since the 1998 Total consortium waiver, but others have been long stalled. Some investors, such as major European firms Repsol, Royal Dutch Shell, and Total, have announced pullouts, declined further investment, or resold their investments to other companies. On July 12, 2008, Total and Petronas, the original South Pars investors, pulled out of a deal to develop a liquified natural gas (LNG) export capability at Phase 11 of South Pars, saying that investing in Iran at a time of growing international pressure over its nuclear program is ―too risky.‖ Also in 2008, Japan significantly reduced its participation in the development of Iran‘s large Azadegan field. Some of the void has been filled, at least partly, by Asian firms such as those of China and Malaysia. However, some of those agreements are being implemented only slowly and these companies are perceived as not being as technically capable as those that have withdrawn from Iran. These trends have constrained Iran‘s energy sector significantly; Iran‘s deputy Oil Minister said in November 2008 that Iran needs about $145 billion in new investment over the next 10 years in order to build a thriving energy sector. As a result of sanctions and the overall climate of international isolation of Iran, its oil production has not grown—it remains at about 4.1 million barrels per day (mbd)—although it has not fallen either. Some observers maintain that, over and above the threat of ISA sanctions and the international pressure on Iran, it is Iran‘s negotiating behavior that has slowed international investment in Iran‘s energy sector. Some international executives that have negotiated with Iran say Iran insists on deals that leave little profit, and that Iran frequently seeks to renegotiate provisions of a contract after it is ratified. Some analyses, including by the National Academy of Sciences, say that, partly because of growing domestic consumption, Iranian oil exports are declining to the point where Iran might have negligible exports of oil by 2015.5 Others maintain that Iran‘s gas sector can more than compensate for declining oil exports, although it needs gas to re-inject into its oil fields and remains a relatively minor gas exporter. It exports about 3.6 trillion cubic feet of gas, primarily to Turkey. A GAO study of December 2007, (GAO-08-58), contains a chart of post-2003 investments in Iran‘s energy sector, totaling over $20 billion in investment,

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although the chart includes petrochemical and refinery projects, as well as projects that do not exceed the $20 million in one year threshold for ISA sanctionability. Since the Total/Petronas/Gazprom project in 1998, no projects have been determined as violations of ISA. Some of the projects listed in the GAO report and in Table 1 below may be under review by the State Department (Bureau of Economic Affairs), but no publication of such deals has been placed in the Federal Register (requirement of Section 5e of ISA), and no determinations of violation have been announced. State Department reports to Congress on ISA, required every six months, have routinely stated that U.S. diplomats raise U.S. policy concerns about Iran with investing companies and their parent countries. However, these reports do not specifically state which foreign companies are being investigated for ISA violations. Undersecretary of State for Political Affairs William Burns testified on July 9, 2008 (House Foreign Affairs Committee), that the Statoil project (listed in Table 1) is under review for ISA sanctions; he did not mention any of the other projects, and no other specific projects have been named since. Nor has there been a formal State Department determination on Statoil since that statement.

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Table 1. Post-1999 Major Investments in Iran’s Energy Sector ($20 million + investments in oil and gas fields only and refinery upgrades included) Date Feb. 1999

Field Doroud (oil)

Apr. 1999

Balal (oil)

Nov. 1999 Apr. 2000

Soroush and Nowruz (oil) Anaran (oil)

July 2000

Phase 4 and 5, South Pars (gas) Caspian Sea oil exploration Darkhovin (oil) Masjid-e-Soleyman (oil) Phase 9 + 10, South Pars (gas) Phase 6, 7, 8, South Pars (gas) (est. to begin producing late 08) Azadegan (oil)

Mar. 2001 June 2001 May 2002 Sep. 2002 Oct. 2002

Jan. 2004

Aug. 2004 Oct. 2004 June 2006 Sept. 2006 Mar. 07

Tusan Block Yadavaran (oil). Finalized December 9, 2007 Gamsar block (oil) Khorramabad block (oil) Esfahan refinery upgrade

Company(ies) Totalfina Elf (France)/ENI (Italy) Totalfina Elf/ Bow Valley (Canada)/ENI Royal Dutch Shell Norsk Hydro (Norway)/ ukoil (Russia) ENI

Value $1 billion

Output/Goal 205,000 bpd

$300 million

40,000 bpd

$800 million $100 million

GVA Consultants (Sweden) ENI Sheer Energy (Canada) LG (South Korea)

$225 million

190,000 bpd 100,000 (by 2010) 2 billion cu.ft./day (cfd) ?

$1 billion $80 million $1.6 billion

160,000 bpd 25,000 bpd 2 billion cfd

Statoil (Norway)

$2.65 billion

3 billion cfd

Inpex (Japan) 10% stake; China National Oil Co. agreed to develop ―north Azadegan‖ in Jan. 2009

$200 million (Inpex stake); China

260,000 bpd

Petrobras (Brazil) Sinopec (China) Sinopec (China) Norsk Hydro (Norway) Daelim (S. Korea)

$1.9 billion

$1.76 billion $34 million $2 billion $20 million $49 million

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? 185,000 bpd (by 2011) ? ?

33

Iran Sanctions Table 1. (Continued) Date Dec. 2007

Value $16 billion

Output/Goal 3.4 billion cfd

Kharg and Bahregansar fields (gas) Salkh and Southern Gashku fields (gas). Includes LNG plant (Nov. 2006) North Pars Gas Field (offshore gas). Includes gas purchases (Dec. 2006) Phase 13, 14 - South Pars (gas); (Feb. 2007). Deal cancelled in May 2008 Phase 22, 23, 24 - South Pars (gas), incl. transport Iranian gas to Europe and building three power plants in Iran. Initialed July 2007; not finalized to date. Iran‘s Kish gas field (April 2008) Phase 12 South Pars (gas). Incl. LNG terminal construction (March 2009)

$1.6 billion ?

? ?

$16 billion

3.6 billion cfd

$4.3 billion

?

$12. billion

2 billion cfd

$7 billion $3.2 billion

1 billion cfd 20 million tonnes of LNG annually by 2012

South Pars gas field (September 2009) Abadan refinery upgrade and expansion; building a new refinery on the Persian Gulf coast (August 2009)

$760 million

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Totals

Field Golshan and Ferdows onshore and offshore gas fields and LNG plant; modified but reaffirmed December 2008

Company(ies) SKS Ventures (Malaysia)

$29.5 billion investment Oil: 1.085 million bpd Gas: 10.4 billion cfd

Source: CRS, GAO cited later, and a wide variety of press announcements and sources. CRS has no way to confirm the precise status of any of the announced investments, and some investments may have been resold to other firms or terms altered since agreement.

Some Members of Congress believe that ISA would have been even more effective if successive Administrations had imposed sanctions, and have expressed frustration that the Executive branch has not imposed ISA sanctions. Section 7043 of P.L. 111-8, the FY2009 omnibus appropriation, requires, within 180 days, an Administration report on U.S. sanctions, including which companies are believed to be violators, and what the Administration is doing to enforce sanctions on Iran. The provision appears to apply primarily to ISA.

Energy Routes and Refinery Investment ISA‘s definition of ―investment‖ has been interpreted by successive Administrations to include construction of energy routes to or through Iran—because such routes help Iran develop its petroleum resources. The Clinton and Bush Administrations used the threat of ISA sanctions to deter oil routes involving Iran and thereby successfully promoted an alternate route from Azerbaijan (Baku) to Turkey (Ceyhan). The route became operational in 2005. No sanctions were imposed on a 1997 project viewed as necessary to U.S. ally Turkey—an Iran-Turkey natural gas pipeline in which each constructed the pipeline on its side of their border. The State Department did not impose ISA sanctions on the grounds that

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Turkey would be importing gas originating in Turkmenistan, not Iran. However, direct Iranian gas exports to Turkey began in 2001, and, as shown in Table 1, in July 2007, a preliminary agreement was reached to build a second Iran- Turkey pipeline, through which Iranian gas would also flow to Europe. That agreement was not finalized during Iranian President Mahmoud Ahmadinej ad‘s visit to Turkey in August 2008 because of Turkish commercial concerns but the deal remains under active discussion. On February 23, 2009, Iranian newspapers said Iran had formed a joint venture with a Turkish firm to export 35 billion cubic meters of gas per year to Europe; 50% of the venture would be owned by the National Iranian Gas Export Company (NIGEC). Another pending deal is the construction of a gas pipeline from Iran to India, through Pakistan (IPI pipeline). The three governments have stated they are committed to the $7 billion project, which would take about three years to complete, but India did not sign a deal ―finalization‖ that was signed by Iran and Pakistan on November 11, 2007. India had reentered discussions on the project following Iranian President Mahmoud Ahmadinej ad‘s visit to India in April 2008, which also resulted in Indian firms‘ winning preliminary Iranian approval to take equity stakes in the Azadegan oil field project and South Pars gas field Phase 12. India did not attend further talks on the project in September 2008, raising continued concerns on security of the pipeline, the location at which the gas would be officially transferred to India, pricing of the gas, tariffs, and the source in Iran of the gas to be sold. Perhaps to address some of those concerns, but also perhaps to move forward whether or not India joins the project, in January 2009 Iran and Pakistan amended the proposed pricing formula for the exported gas to reflect new energy market conditions. During the Bush Administration, Secretary of State Rice, on several occasions ―expressed U.S. concern‖ about the pipeline deal or have called it ―unacceptable,‖ but no U.S. official has stated outright that it would be sanctioned. Iran might also be exploring other export routes for its gas. A potential project involving Iran is the Nabucco pipeline project, which would transport Iranian gas to western Europe. Iran, Turkey, and Austria reportedly are negotiating on that project. The Bush Administration did not support Iran‘s participation in the project and the Obama Administration apparently takes the same view, even though the project might make Europe less dependent on Russian gas supplies. Iran‘s Energy Minister Gholam-Hossein Nozari said on April 2, 2009, that Iran is considering negotiating a gas export route—the ―Persian Pipeline‖—that would send gas to Europe via Iraq, Syria, and the Mediterranean Sea.

Refinery Construction Construction of oil refineries or petrochemical plants in Iran—included in the referenced GAO report—might also constitute sanctionable projects because they might, according to ISA‘s definition of investment: ―include responsibility for the development of petroleum resources located in Iran.‖ Iran has plans to build or expand, possibly with foreign investment, at least eight refineries in an effort to ease gasoline imports that supply about 30%-40% of Iran‘s needs. It is not clear whether or not Iranian investments in energy projects in other countries, such as Iranian investment to help build five oil refineries in Asia (China, Indonesia, Malaysia, and Singapore) and in Syria, reported in June 2007, would constitute sanctionable investment under ISA.

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Significant Purchase Agreements Major energy deals with Iran that involve purchases of oil or natural gas from Iran would not appear to constitute violations of ISA, because ISA sanctions investment in Iran, not trade with Iran. Many of the deals listed in the chart later in this paper involve combinations of investment and purchase. In March 2008, Switzerland‘s EGL utility agreed to buy 194 trillion cubic feet per year of Iranian gas for 25 years, through a Trans-Adriatic Pipeline (TAP) to be built by 2010, a deal valued at least $15 billion. The United States criticized the deal as sending the ―wrong message‖ to Iran. However, as testified by Under Secretary of State Burns on July 9, 2008, the deal appears to involve only purchase of Iranian gas, not exploration, and likely does not violate ISA. In August 2008, Germany‘s SteinerPrematechnik-Gastec Co. agreed to apply its method of turning gas into liquid fuel at three Iranian plants. In early October 2008, Iran agreed to export 1 billion cu.ft./day of gas to Oman, via a pipeline to be built that would end at Oman‘s LNG export terminal facilities. Efforts in the 110th Congress to Expand ISA Application In the 110th Congress, several bills contained numerous provisions that would have further amended ISA, but they were not adopted. H.R. 1400, which passed the House on September 25, 2007 (397-16), would have removed the Administration‘s ability to waive ISA sanctions under Section 9(c), national interest grounds, but it would not have imposed on the Administration a time limit to determine whether a project is sanctionable. That bill and several others—including S. 970, S. 3227, S. 3445, H.R. 957 (passed the House on July 31, 2007), and H.R. 7112 (which passed the House on September 26, 2008)— would have: (1) expanded the definition of sanctionable entities to official credit guarantee agencies, such as France‘s COFACE and Germany‘s Hermes, and to financial institutions and insurers generally; and (2) made investment to develop a liquified natural gas (LNG) sector in Iran a sanctionable violation. Iran has no LNG export terminals, in part because the technology for such terminals is patented by U.S. firms and unavailable for sale to Iran. Among related bills in the 110th Congress, H.R. 2880 would have made sales to Iran of refined petroleum resources a violation of ISA, although some believe that a sanction such as this would only be effective if it applied to all countries under a U.N. Security Council resolution rather than a unilateral U.S. sanction. H.R. 2347, (passed the House on July 31, 2007), would protect from lawsuits fund managers that divest from firms that make ISAsanctionable investments. (A version of this bill, H.R. 1327, has been introduced in the 111th Congress.) In early 2009, there were some indications that congressional sentiment had some effect on foreign firms, even without enactment of significant ISA amendment in the 110th Congress. In January 2009, Reliance Industries Ltd of India said it would cease new sales of refined gasoline to Iran after completing existing contracts that expired December 31, 2008. The Reliance decision came after several Members of Congress urged the Exim Bank of the United States to suspend assistance to Reliance, on the grounds that it was assisting Iran‘s economy with the gas sales. The Exim Bank, in August 2008, had extended a total of $900 million in financing guarantees to Reliance to help it expand. However, some observers say Reliance continues to make such sales to Iran.

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Legislation in the 111th Congress: Targeting Gasoline Sales A number of ideas to expand ISA‘s application, similar to those that surfaced in the 110th Congress, have been introduced in the 111th Congress. The major bills in the 111th Congress, in general, seek to take advantage of Iran‘s dependence on imported gasoline. As noted, such sales to Iran are not currently sanctionable under ISA, according to widely accepted definitions of ISA violations. One measure was passed in the Senate; an amendment to S.Con.Res. 13, the FY2010 budget resolution, expressed the Sense of Congress that the U.S. government not purchase any goods or services from any international firm that obtains at least $1 million in revenue from the sale of goods or services to Iran‘s energy sector. The provision defined these goods or services as including development of Iran‘s oil and gas fields; selling refined petroleum products to Iran, the enhancement or maintenance of Iran‘s oil refineries, and the provision of shipping or shipping insurance services to Iran. This provision was intended to prevent the U.S. government from procuring any products or services from any firm that conducts the sanctionable activity as defined in the provision. Filling the Strategic Petroleum Reserve with products from such firms would presumably end, if that provision had been adopted by both chambers and the recommendation followed by the Administration. An amendment along these lines was adopted in the conference report on a FY2010 Energy and Water Appropriation (H.R. 3183). In the aftermath of Iran‘s crackdown on post-June 12, 2009, presidential election protests, the House Appropriations Committee marked up a version of a FY20 10 foreign aid appropriation (H.R. 3081) that would deny Eximbank credits to any firm that sells gasoline to Iran, provides equipment to Iran that it can use to expand its oil refinery capabilities, or performs gasoline production projects in Iran. In April 2009, several bills were introduced—H.R. 2194, S. 908, H.R. 1208, and H.R. 1985—that would make sanctionable efforts by foreign firms to supply refined gasoline to Iran or to supply equipment to Iran that could be used by Iran to expand or construction oil refineries. Such activity is not now sanctionable under ISA. S. 908 and H.R. 2194—both titled the Iran Refined Petroleum Sanctions Act of 2009 (IRPSA)—would, in addition, expand the menu of sanctions to be imposed against violating firms. In both these bills, the new mandatory sanctions would include (1) prohibiting transactions in foreign exchange by the sanctioned firm; (2) prohibiting any financial transactions on behalf of the sanctioned firm; and (3) prohibiting any acquisitions or ownership of U.S. property by the sanctioned entity. H.R. 1208 contained numerous other provisions that were in several of the bills mentioned above in the 110th Congress, including eliminating the exemption in the trade ban that allows importation of Iranian luxury goods, and applying the trade ban to subsidiaries of U.S. firms (if those subsidiaries were used by the parent specifically to conduct trade with Iran).

Likely Effects of the Iran Refined Petroleum Sanctions Act Some Members who have introduced or co-signed versions of the Iran Refined Petroleum Sanctions Act have said that although such legislation might appear to conflict with President Obama‘s diplomatic outreach to Iran, such bills might strengthen that approach by demonstrating to Iran that there are substantial downsides to rebuffing the U.S. overtures.

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Upon introducing H.R. 2194, Representative Howard Berman, Chairman of the House Foreign Affairs Committee, said: ―I fully support the Administration‘s strategy of direct diplomatic engagement with Iran, and I have no intention of moving this bill through the legislative process in the near future.... However, should engagement with Iran not yield the desired results in a reasonable period of time, we will have no choice but to press forward with additional sanctions—such as those contained in this bill—that could truly cripple the Iranian economy.‖ Observers have said that the Chairman might try to advance the legislation if Iran does not meet the ―deadline‖ of September 24, 2009 to return to multilateral nuclear negotiations, although Iran appears to have now met the deadline by agreeing to talks with the P5+1 countries on October 1, 2009. The United States has accepted the talks and will send a representative to them, even though the United States has said it will not abide by Iran‘s statements that the talks not discuss Iran‘s continued enrichment of uranium. Attempting to restrict gasoline sales to Iran is a focus not only of U.S. legislation but also of discussions among the P5+1 about further sanctions should nuclear negotiations not produce significant or lasting results. Therefore, there has been a debate over whether such a ban would accomplish significant goals in Iran. Some believe Iran‘s dependence on gasoline imports would, at the very least, cause Iran‘s government to have to spend more for such imports. Others, however, believe the government would not import more gasoline, but rather ration it or reduce subsidies for it in an effort to reduce gasoline consumption. Many believe that Iran has many willing gasoline suppliers who might ignore a U.S. law, and possibly even a U.N. resolutions along these lines. Iran and Venezuela (Petroleos de Venezuela S.A.) signed a gasoline supply deal in September 2009 that some see as a strategy by Iran to demonstrate the ineffectiveness of such a sanction. Still others believe that a gasoline ban would cause Iranians to blame the United States and United Nations for its plight and cause Iranians to rally around President Ahmadinejad, thereby rebuilding his popularity that has suffered because of the 2009 election dispute.6 On the other hand, a U.N. gasoline ban, which would be mandatory on U.N. member states, would likely drive Iran‘s main gas suppliers out of the Iranian market. These are, according to a variety of sources: Vitol of Switzerland; Trafigura of Switzerland; Glencore of Switzerland; Total of France; Reliance Industries of India; Petronas of Malaysia; and Lukoil of Russia. Royal Dutch Shell of the Netherlands and British Petroleum of United Kingdom have been suppliers as well, although they reportedly have reduced supplies because of Iran‘s increasingly outcast international status. Petroleos de Venezuela might be affected because of its September 2009 deal to supply Iran with gasoline, as would state-owned Chinese firms that reportedly now provide Iran with up to one-third of its gasoline imports.7

RELATIONSHIPS TO OTHER U.S. SANCTIONS ISA is one of many mechanisms the United States and its European partners are using to try to pressure Iran. The following sections discuss other U.S. sanctions and measures to pressure Iran‘s economy. United Nations sanctions, which have gradually increased since 2006, are discussed in detail in CRS Report RL3 2048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman. The U.N. sanctions are discussed in that report in conjunction with analysis of multilateral efforts to curb Iran‘s nuclear program; which also is

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discussed in that CRS report. Iranian entities and persons sanctioned by the United Nations are included in Table 3 at the end of this paper.

Ban on U.S. Trade and Investment with Iran On May 6, 1995, President Clinton issued Executive Order 12959 banning U.S. trade and investment in Iran.8 This followed an earlier March 1995 executive order barring U.S. investment in Iran‘s energy sector. The trade ban was intended to blunt criticism that U.S. trade with Iran made U.S. appeals for multilateral containment of Iran less credible. Each March since 1995 (and most recently on March 11, 2009), the U.S. Administration has renewed a declaration of a state of emergency that triggered the investment ban. Some modifications to the trade ban since 1999 account for the trade between the United States and Iran. As noted, in the 111th Congress, H.R. 1208 would reimpose many of the trade restrictions. The following conditions and modifications, as administered by the Office of Foreign Assets Control (OFAC) of the Treasury Department, apply: 

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





Some goods related to the safe operation of civilian aircraft may be licensed for export to Iran, and as recently as September 2006, the George W. Bush Administration, in the interests of safe operations of civilian aircraft, permitted a sale by General Electric of Airbus engine spare parts to be installed on several Iran Air passenger aircraft (by European airline contractors). U.S. firms may not negotiate with Iran or to trade Iranian oil overseas. The trade ban permits U.S. companies to apply for licenses to conduct ―swaps‖ of Caspian Sea oil with Iran. However, a Mobil Corporation application to do so was denied in April 1999. Since April 1999, commercial sales of food and medical products to Iran have been allowed, on a case-by-case basis and subject to OFAC licensing. According to OFAC in April 2007, licenses for exports of medicines to treat HIV and leukemia are routinely expedited for sale to Iran, and license applications are viewed favorably for business school exchanges, earthquake safety seminars, plant and animal conservation, and medical training in Iran. Private letters of credit can be used to finance approved transactions, but no U.S. government credit guarantees are available, and U.S. exporters are not permitted to deal directly with Iranian banks. The FY2001 agriculture appropriations law (P.L. 106-387) contained a provision banning the use of official credit guarantees for food and medical sales to Iran and other countries on the U.S. terrorism list, except Cuba, although allowing for a presidential waiver to permit such credit guarantees. Neither the Clinton Administration nor the George W. Bush Administration provided the credit guarantees. In April 2000, the trade ban was further eased to allow U.S. importation of Iranian nuts, dried fruits, carpets, and caviar. The United States was the largest market for Iranian carpets before the 1979 revolution, but U.S. anti-dumping tariffs imposed on Iranian products in 1986 dampened of many Iranian products. The tariff on Iranian

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carpets is now about 3%-6%, and the duty on Iranian caviar is about 15%. In December 2004, U.S. sanctions were further modified to allow Americans to freely engage in ordinary publishing activities with entities in Iran (and Cuba and Sudan). As of mid-2007, the product most imported from Iran by U.S. importers is pomegranate juice concentrate. In the 110th Congress, H.R. 1400, S. 970, S. 3445, and H.R. 7112 would have re-imposed the full import ban.

Application to Foreign Subsidiaries of U.S. Firms The U.S. trade ban does not bar subsidiaries of U.S. firms from dealing with Iran, as long as the subsidiary has no operational relationship to the parent company. Among major subsidiaries that have traded with Iran are the following: 

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Halliburton. On January 11, 2005, Iran said it had contracted with U.S. company Halliburton, and an Iranian company, Oriental Kish, to drill for gas in Phases 9 and 10 of South Pars. Halliburton reportedly provided $30 million to $35 million worth of services per year through Oriental Kish, leaving unclear whether Halliburton would be considered in violation of the U.S. trade and investment ban or the Iran Sanctions Act (ISA)9—because the deals involved a subsidiary of Halliburton (Cayman Islands-registered Halliburton Products and Service, Ltd, based in Dubai). On April 10, 2007, Halliburton announced that its subsidiaries had, as promised in January 2005, no longer operating in Iran. General Electric (GE). The firm announced in February 2005 that it would seek no new business in Iran, and it reportedly wound down pre-existing contracts by July 2008. GE was selling Iran equipment and services for hydroelectric, oil and gas services, and medical diagnostic projects through Italian, Canadian, and French subsidiaries. Foreign subsidiaries of several other U.S. energy equipment firms are apparently still in the Iranian market. These include Foster Wheeler, Natco Group, Overseas Shipholding Group,10 UOP (a Honeywell subsidiary), Itron, Fluor, Flowserve, Parker Drilling, Vantage Energy Services, Weatherford, and a few others. An Irish subsidiary of the Coca Cola company provides syrup for the U.S.-brand soft drink to an Iranian distributor, Khoshgovar. Local versions of both Coke and of Pepsi (with Iranian-made syrups) are also marketed in Iran by distributors who licensed the recipes for those soft drinks before the Islamic revolution and before the trade ban was imposed on Iran.

In the 110th Congress, S. 970, S. 3227, S. 3445, and three House-passed bills (H.R. 1400, H.R. 7112, and H.R. 957)—would have applied sanctions to the parent companies of U.S. subsidiaries if those subsidiaries are directed or formed to trade with Iran. In the 111th Congress, H.R. 1208 contains a similar provision.

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Treasury Department “Targeted Financial Measures” U.S. officials, whose leverage has been enhanced by five U.N. Security Council Resolutions passed since 2006 that sanction Iran, have persuaded many European and other banks not to finance exports to Iran or to process dollar transactions with Iranian banks; and they have persuaded European governments to reduce export credits guarantees to Iran. The actions have, according to the International Monetary Fund, partly dried up financing for energy industry and other projects in Iran, and have caused potential investors in the energy sector to withdraw from or hesitate on finalizing pending projects. These are the results of ―targeted financial measures‖ undertaken by the Treasury Department, particularly the office of Undersecretary of the Treasury Stuart Levey (who has remained in the Obama Administration). Levey and other officials have been able to convince individual foreign banks that dealing with Iran entails financial risk and furthers terrorism and proliferation. Treasury Secretary Timothy Geithner has described Levey as having ―led the design of a remarkably successful program‖11 with regard to targeting Iran‘s proliferation networks. Treasury and State Departments officials, in April 17, 2008, testimony before the House Foreign Affairs Committee, said they had persuaded at least 40 banks not to provide financing for exports to Iran or to process dollar transactions for Iranian banks. Among those that have pulled out of Iran are UBS and Credit Suisse (Switzerland), HSBC (Britain), Germany‘s Commerzbank A.G and Deutsche Bank AG. U.S. pressure has reportedly convinced Kuwaiti banks to stop transactions with Iranian accounts,12 and some banks in Asia (primarily South Korea and Japan) and the rest of the Middle East have done the same. The International Monetary Fund and other sources report that these measures are making it more difficult to fund energy industry and other projects in Iran and for importers/exporters to conduct trade in expensive items. Some of these results have come about through U.S. pressure. In 2004, the Treasury Department fined UBS $100 million for the unauthorized movement of U.S. dollars to Iran and other sanctioned countries, and in December 2005, the Treasury Department fined Dutch bank ABN Amro $80 million for failing to fully report the processing of financial transactions involving Iran‘s Bank Melli (and another bank partially owned by Libya). In action intended to cut Iran off from the U.S. banking system, on September 6, 2006, the Treasury Department barred U.S. banks from handling any indirect transactions (―U-turn transactions, meaning transactions with non-Iranian foreign banks that are handling transactions on behalf of an Iranian bank) with Iran‘s Bank Saderat (see above), which the Administration accuses of providing funds to Hezbollah.13 Bank Sepah is subject to asset freezes and transactions limitations as a result of Resolution 1737 and 1747. The Treasury Department extended that U- Turn restriction to all Iranian banks on November 6, 2008. Thus far, the Treasury Department has not designated any bank as a ―money laundering entity‖ for Iran-related transactions (under Section 311 of the USA Patriot Act), although some say that step has been threatened at times. Nor has Treasury imposed any specific sanctions against Bank Markazi (Central Bank) which, according to a February 25, 2008, Wall Street Journal story, is helping other Iranian banks circumvent the U.S. and U.N. banking pressure. However, the European countries reportedly oppose such a sanction as an extreme step with potential humanitarian consequences, for example by preventing Iran from keeping its currency stable. S. 3445, a Senate bill in the 110th Congress, and a counterpart

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passed by the House on September 26, 2008, H.R. 7112, call for this sanction. The FY20 10 National Defense Authorization Act (H.R. 2647), as passed by the Senate, expresses the Sense of the Senate that the Administration sanction Iran‘s Central Bank if Iran does not negotiate in good faith to curb its nuclear program. In enforcing U.S. sanctions, on December 17, 2008, the U.S. Attorney for the Southern District of New York filed a civil action seeking to seize the assets of the Assa Company, a U.K-chartered entity. Assa allegedly was maintaining the interests of Bank Melli in an office building in New York City. An Iranian foundation, the Alavi Foundation, allegedly is an investor in the building.

Terrorism-Related Sanctions Several U.S. sanctions are in effect as a result of Iran‘s presence on the U.S. ―terrorism list.‖ The list was established by Section 6(j) of the Export Administration Act of 1979, sanctioning countries determined to have provided repeated support for acts of international terrorism. Iran was added to the list in January 1984, following the October 1983 bombing of the U.S. Marine barracks in Lebanon (believed perpetrated by Hezbollah). Sanctions imposed as a consequence include a ban on U.S. foreign aid to Iran; restrictions on U.S. exports to Iran of dual use items; and requires the United States to vote against international loans to Iran.

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The terrorism list designation restricts sales of U.S. dual use items (Export Administration Act, as continued by executive order), and, under other laws, bans direct U.S. financial assistance (Foreign Assistance Act, FAA) and arms sales (Arms Export Control Act), and requires the United States to vote to oppose multilateral lending to the designated countries (Anti-Terrorism and Effective Death Penalty Act of 1996, P.L. 104-132). Waivers are provided under these laws, but successive foreign aid appropriations laws since the late 1 980s ban direct assistance to Iran (loans, credits, insurance, Eximbank credits) without providing for a waiver. Section 307 of the FAA (added in 1985) names Iran as unable to benefit from U.S. contributions to international organizations, and require proportionate cuts if these institutions work in Iran. No waiver is provided for. The Anti-Terrorism and Effective Death Penalty Act also requires the President to withhold U.S. foreign assistance to any country that provides to a terrorism list country foreign assistance or arms. Waivers are provided.

U.S. sanctions laws do not bar disaster aid and the United States donated $125,000, through relief agencies, to help victims of two earthquakes in Iran (February and May 1997), and another $350,000 worth of aid to the victims of a June 22, 2002 earthquake. (The World Bank provided some earthquake related lending as well.) The United States provided $5.7 million in assistance (out of total governmental pledges of about $32 million, of which $17 million have been remitted) to the victims of the December 2003 earthquake in Bam, Iran, which killed as many as 40,000 people and destroyed 90% of Bam‘s buildings. The United States military flew in 68,000 kilograms of supplies to Bam.

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Executive Order 13224 The separate, but related, Executive Order 13324 (September 23, 2001) authorizes the President to freeze the assets of and bar U.S. transactions with entities determined to be supporting international terrorism. Iranian entities named and sanctioned under this order are in the tables at the end of CRS Report RL3 2048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman. Those tables also include the names of Iranian entities sanctioned by the United Nations.

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Proliferation-Related Sanctions Iran is prevented from receiving advanced technology from the United States under relevant and Iran-specific anti-proliferation laws14 and by Executive Order 13382 (June 28, 2005). The Iran-Iraq Arms Nonproliferation Act (P.L. 102-484) requires denial of license applications for exports to Iran of dual use items, and imposes sanctions on foreign countries that transfer to Iran ―destabilizing numbers and types of conventional weapons,‖ as well as WMD technology. The Iran Nonproliferation Act (P.L. 106-178, now called the Iran-Syria-North Korea Non-Proliferation Act) authorizes sanctions on foreign entities that assist Iran‘s WMD programs. It bans U.S. extraordinary payments to the Russian Aviation and Space Agency in connection with the international space station unless the President can certify that the agency or entities under its control had not transferred any WMD or missile technology to Iran within the year prior.15 (A Continuing Resolution for FY2009, which funded the U.S. government through March 2009, waived this law to allow NASA to continue to use Russian vehicles to access the International Space Station.) Executive Order 13382 allows the President to block the assets of proliferators of weapons of mass destruction (WMD) and their supporters under the authority granted by the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.), and Section 301 of Title 3, United States Code. The George W. Bush Administration decided to impose sanctions for violations, and it sanctioned numerous entities as discussed below. The Obama Administration sanctioned several entities on February 2, 2009, suggesting it is continuing that policy. Iranian entities designated under these laws and orders are listed in the tables at the end of CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman, which includes lists of other entities sanctioned by the United Nations and other U.S. laws and Executive orders. Despite these efforts, Iran has used loopholes and other devices, such as front companies, to elude U.S. and international sanctions. Some of these efforts focus on countries perceived as having lax enforcement of export control laws, such as UAE and Malaysia. In some cases, Iran has been able, according to some reports, to obtain sophisticated technology even from U.S. firms.16

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In addition, successive foreign aid appropriations punish the Russian Federation for assisting Iran by withholding 60% of any U.S. assistance to the Russian Federation unless it terminates technical assistance to Iran‘s nuclear and ballistic missiles programs.

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Relations to International Sanctions The U.S. sanctions discussed in this paper are more extensive than those imposed, to date, by the United Nations Security Council. However, some of the U.N. sanctions are similar to some unilateral U.S. sanctions and sanctions that have been imposed separately by U.S. allies. As part of a multilateral process of attempting to convince Iran to choose the path of negotiations or face further penalty, during 2006-2008, three U.N. Security Council resolutions—1737, 1747, and 1803—imposed sanctions primarily on Iran‘s weapons of mass destruction (WMD) infrastructure. While pressing for sanctions, the multilateral group negotiation with Iran (―P5+ 1 :‖ the Security ]Council permanent members, plus Germany) at the same time offered Iran incentives to suspend uranium enrichment; the last meeting between Iran and the P5+1 to discuss these issues was in July 2008. The negotiations made little progress, and then entered a hiatus for the U.S. presidential election, the establishment of the Obama Administration, and then the Iranian presidential election. As noted above, talks resumed on October 1, 2009, and were viewed as productive. Had they not been, a U.N. ban on gasoline sales to Iran might have been discussed, although comments by the Russian and French Foreign Ministers during September 10-21, 2009, suggest that support for such a step within the U.N. Security Council is lacking. Other ideas reportedly under discussion include a British proposal to ban worldwide investment in Iran‘s energy sector, which would represent a U.N. endorsement of the key concept of the Iran Sanctions Act, and a ban on transactions with a broader range of Iranian banks. As noted, these ideas are likely on hold unless and until Iran‘s commitments made on October 1, 2009, particularly the commitment to send out its low-enriched uranium for reprocessing abroad, are tested. The main provisions of the current U.N. sanctions are below: Table 2. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program (1737, 1747, and 1803) Require Iran to suspend uranium enrichment Prohibit transfer to Iran of nuclear, missile, and dual use items to Iran, except for use in light water reactors Prohibit Iran from exporting arms or WMD-useful technology Freeze the assets of 40 named Iranian persons and entities, including Bank Sepah, and several Iranian front companies Require that countries exercise restraint with respect to travel of 35 named Iranians and ban the travel of 5 others Call on states not to export arms to Iran or support new business with Iran Call for vigilance with respect to the foreign activities of all Iranian banks, particularly Bank Melli and Bank Saderat Calls on countries to inspect cargoes carried by Iran Air Cargo and Islamic Republic of Iran Shipping Lines if there are indications they carry cargo banned for carriage to Iran.

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Efforts to Promote Divestment and Internet Freedom

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A growing trend not only in Congress but in several states is to require or call for or require divestment of shares of firms that have invested in Iran‘s energy sector (at the same levels considered sanctionable under the Iran Sanctions Act).17 Legislation in the 110th Congress, H.R. 1400, did not require divestment, but requires a presidential report on firms that have invested in Iran‘s energy sector. Another bill, H.R. 1357, required government pension funds to divest of shares in firms that have made ISAsanctionable investments in Iran‘s energy sector and bar government and private pension funds from future investments in such firms. Two other bills, H.R. 2347 (passed by the House on July 31, 2007) and S. 1430, would protect mutual fund and other investment companies from shareholder action for any losses that would occur from divesting in firms that have investing in Iran‘s energy sector. In the 111th Congress, H.R. 1327 (Iran Sanctions Enabling Act), a bill similar to H.R. 2347 of the 110th Congress, was reported by the Financial Services Committee on April 28, 2009. A similar bill. S. 1065, has been introduced in the Senate.

Efforts to Prevent Internet Monitoring by Iran Another trend in the 111th Congress, after the Iran election dispute, has been efforts to promote Internet freedom in Iran or prevent the Iranian government from censoring or controlling the Internet, or using it to identify opponents. S. 1475 and H.R. 3284, the Reduce Iranian CyberSuppression Act, would authorize the President to ban U.S. governments contracts with foreign companies that sell technology that Iran could use to monitor or control Iranian usage of the internet. Firms, including a joint venture between Nokia (Finland) and Siemens (Germany), reportedly sold such technology to Iran in 2008.18 Some question whether such a sanction might reduce allied cooperation with the United States if allied companies are so sanctioned.

Blocked Iranian Property and Assets Iranian leaders continue to assert that the United States is holding Iranian assets, and that this is an impediment to improved relations. A U.S.-Iran Claims Tribunal at the Hague continues to arbitrate cases resulting from the 1980 break in relations and freezing of some of Iran‘s assets. Major cases yet to be decided center on hundreds of Foreign Military Sales (FMS) cases between the United States and the Shah‘s regime, which Iran claims it paid for but were unfulfilled. About $400 million in proceeds from the resale of that equipment was placed in a DOD FMS account, and about $22 million in Iranian diplomatic property remains blocked, although U.S. funds have been disbursed—credited against the DOD FMS account—to pay judgments against Iran for past acts of terrorism against Americans. Other disputes include the mistaken U.S. shoot-down on July 3, 1988, of an Iranian Airbus passenger jet (Iran Air flight 655), for which the United States, in accordance with an ICJ judgment, paid Iran $61.8 million in compensation ($300,000 per wage earning victim, $150,000 per non-wage earner) for the 248 Iranians killed. The United States has not compensated Iran for the airplane itself. As it has in past similar cases, the Bush

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Administration opposed a terrorism lawsuit against Iran by victims of the U.S. Embassy Tehran seizure on the grounds of diplomatic obligation.19

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Table 3. Entities Sanctioned under U.N. Resolutions and U.S. Laws and Executive Orders (Persons listed are identified by the positions they held when designated; some have since changed) Entities Named for Sanctions Under Resolution 1737 Atomic Energy Organization of Iran (AEIO) Gen Hosein Salimi (Commander, IRGC Air Mesbah Energy Company (Arak supplier) Force) Kalaye Electric (Natanz supplier)) Dawood Agha Jani (Natanz official) Pars Trash Company (centrifuge program) Ali Hajinia Leilabadi (director of Mesbah Farayand Technique (centrifuge program) Energy) Defense Industries Organization (DIO) Lt. Gen. Mohammad Mehdi Nejad Nouri 7th of Tir (DIO subordinate) (Malak Ashtar University of Defence Shahid Hemmat Industrial Group (SHIG)— Technology rector) missile program Bahmanyar Morteza Bahmanyar (AIO official) Shahid Bagheri Industrial Group (SBIG) Reza Gholi Esmaeli (AIO official) missile program Ahmad Vahid Dastjerdi Fajr Industrial Group (missile program) (head of Aerospace Industries Org., AIO) Mohammad Qanadi, AEIO Vice President Maj. Gen. Yahya Rahim Safavi (Commander in Behman Asgarpour (Arak manager) Chief, IRGC) Ehsan Monajemi (Natanz construction manager) Jafar Mohammadi (Adviser to AEIO) Entities/Persons Added by Resolution 1747 Ammunition and Metallurgy Industries Group Fereidoun Abbasi-Davani (controls 7th of Tir) (senior defense scientist) Parchin Chemical Industries (branch of DIO) Mohasen Fakrizadeh-Mahabai Karaj Nuclear Research Center (defense scientist) Novin Energy Company Seyed Jaber Safdari (Natanz manager) Cruise Missile Industry Group Mohsen Hojati (head of Fajr Industrial Group) Sanam Industrial Group (subordinate to AIO) Ahmad Derakshandeh (head of Bank Sepah) Ya Mahdi Industries Group Brig. Gen. Mohammad Reza Zahedi (IRGC Kavoshyar Company (subsidiary of AEIO) ground forces commander) Sho‘a Aviation (produces IRGC light aircraft Amir Rahimi for asymmetric warfare) (head of Esfahan nuclear facilities) Bank Sepah Mehrdada Akhlaghi Ketabachi (head of SBIG) (funds AIO and subordinate entities) Naser Maleki (head of SHIG) Esfahan Nuclear Fuel Research and Production Brig. Gen. Morteza Reza‘I Center and Esfahan Nuclear Technology Center (Deputy commander-in-chief, IRGC) Qods Aeronautics Industries Vice Admiral Ali Akbar Ahmadiyan (produces UAV‘s, para-gliders for IRGC (chief of IRGC Joint Staff) asymmetric warfare Brig. Gen. Mohammad Hejazi Pars Aviation Services Company (maintains (Basij commander) IRGC Air Force equipment) Gen. Mohammad Baqr Zolqadr (IRGC officer serving as deputy Interior Minister Brig. Gen. Qasem Soleimani (Qods Force commander)

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Table 3. (Continued) Entities Added by Resolution 1803 Thirteen Iranians named in Annex 1 to Ettehad Technical Group Resolution 1803; all reputedly involved in AIO front co.) various aspects of nuclear program Industrial Factories of Precision Electro Sanam Co. Joza Industrial Co. Abzar Boresh Kaveh Co. Pshgam (Pioneer) Energy Industries (centrifuge production) Tamas Co. Barzaganin Tejaral Tavanmad Saccal (involved in uranium enrichment) Jabber Ibn Hayan Khorasan Metallurgy Industries Niru Battery Manufacturing Co. (Makes batteries for Iranian military and missile systems) Safety Equipment Procurement (AIO front, involved in missiles) Entities Designated under U.S. Executive Order 13382 (many designations coincident with designations under U.N. resolutions) Entity Date Named Shahid Hemmat Industrial Group (Iran) June 2005, Sept. 07 Shahid Bakeri Industrial Group (Iran) June 2005, Feb. 2009 Atomic Energy Organization of Iran June 2005 Novin Energy Company (Iran) January 2006 Mesbah Energy Company (Iran) January 2006 Four Chinese entities: Beijing Alite TechnoJune 2006 logies, LIMMT Economic and Trading Company, China Great Wall Industry Corp, and China National Precision Machinery Import/Export Corp. Sanam Industrial Group (Iran) July 2006 Ya Mahdi Industries Group (Iran) July 2006 Bank Sepah (Iran) January 2007 Defense Industries Organization (Iran) March 2007 Pars Trash (Iran, nuclear program) June 2007 Farayand Technique (Iran, nuclear program) June 2007 Fajr Industries Group (Iran, missile program) June 2007 Mizan Machine Manufacturing Group (Iran, June 2007 missile prog.) Aerospace Industries Organization (AIO) (Iran) Sept. 2007 Korea Mining and Development Corp. (N. Korea) Sept. 2007 Islamic Revolutionary Guard Corps (IRGC) Ministry of Defense and Armed Forces October 21, 07 Logistics October 21 Bank Melli (Iran‘s largest bank, widely used by Guard); Bank Melli Iran Zao (Moscow); Melli October 21 Bank PC (U.K.) Bank Kargoshaee October 21 Entities Designated under U.S. Executive Order 13382 (many designations coincident with designations under U.N. resolutions) Arian Bank (joint venture between Melli and October 21 Bank Saderat). Based in Afghanistan

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Iran Sanctions Bank Mellat (provides banking services to Iran‘s nuclear sector); Mellat Bank SB CJSC (Armenia). Reportedly has $1.4 billion in assets in UAE Persia International Bank PLC (U.K.) Khatam ol Anbiya Gharargah Sazendegi Nooh (Revolutionary Guard construction, contracting arm, with $7 billion in oil, gas deals Oriental Oil Kish (Iranian oil exploration firm) Ghorb Karbala; Ghorb Nooh (synonymous with Khatam ol Anbiya) Sepasad Engineering Company (Guard construction affiliate) Omran Sahel (Guard construction affiliate) Sahel Consultant Engineering (Guard construction affiliate) Hara Company Gharargahe Sazandegi Ghaem Bahmanyar Morteza Bahmanyar (AIO, Iran missile official, see above under Resolution 1737) Ahmad Vahid Dastjerdi (AIO head, Iran missile program) Reza Gholi Esmaeli (AIO, see under Resolution 1737) Morteza Reza‘i (deputy commander, IRGC) See also Resolution 1747 Mohammad Hejazi (Basij commander). Also, Resolution 1747 Ali Akbar Ahmadian (Chief of IRGC Joint Staff). Resolution 1747 Hosein Salimi (IRGC Air Force commander). Resolution 1737 Qasem Soleimani (Qods Force commander). Resolution 1747 Future Bank (Bahrain-based but allegedly controlled by Bank Melli) Yahya Rahim Safavi (former IRGC Commander in Chief Mohsen Fakrizadeh-Mahabadi (senior Defense Ministry scientist) Dawood Agha-Jani (head of Natanz enrichment site)

October 21

October 21 October 21

October 21 October 21 October 21 October 21 October 21 October 21 October 21 October 21

October 21 October 21 October 21 October 21, October 21, October 21, October 21 March 12, 2008 July 8, 2008 July 8, 2008 July 8, 2008

Mohsen Hojati (head of Fajr Industries, involved in missile program) Mehrdada Akhlaghi Ketabachi (heads Shahid Bakeri Industrial Group) Naser Maliki (heads Shahid Hemmat Industrial Group) Tamas Company (involved in uranium enrichment) Shahid Sattari Industries (makes equipment for Shahid Bakeri)

July 8, 2008 July 8, 2008 July 8, 2008 July 8, 2008 July 8, 2008

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Table 3. (Continued) Entities Designated under U.S. Executive Order 13382 (many designations coincident with designations under U.N. resolutions) 7th of Tir (involved in developing centrifuge July 8, 2008 technology) Ammunition and Metallurgy Industries Group July 8, 2008 (partner of 7th of Tir) Parchin Chemical Industries (deals in chemicals July 8, 2008 used in ballistic missile programs) Karaj Nuclear Research Center August 12, 08 Esfahan Nuclear Fuel Research and Production August 12, 08 Center (NFRPC) Jabber Ibn Hayyan (reports to Atomic Energy August 12, 08 Org. of Iran, AEIO) Safety Equipment Procurement Company August 12, 08 Joza Industrial Company (front company for August 12, 08 Shahid Hemmat Industrial Group, SHIG) Islamic Republic of Iran Shipping Lines September 10, 2008 (IRISL) and 18 affiliates, including Val Fajr 8; Kazar; Irinvestship; Shipping Computer Services; Iran o Misr Shipping; Iran o Hind; IRISL Marine Services; Iriatal Shipping; South Shipping; IRISL Multimodal; Oasis; IRISL Europe; IRISL Benelux; IRISL China; Asia Marine Network; CISCO Shipping; and IRISL Malta Firms affiliated to the Ministry of Defense, September 17, 2008 including Armament Industries Group; Farasakht Industries; Iran Aircraft Manufacturing Industrial Co.; Iran Communications Industries; Iran Electronics Industries; and Shiraz Electronics Industries Export Development Bank of Iran. Provides October 22, 2008 financial services to Iran‘s Ministry of Defense and Armed Forces Logistics Assa Corporation (alleged front for Bank Melli December 17, 2008 involved in managing property in New York City on behalf of Iran) 11 Entities Tied to Bank Melli: Bank Melli Iran March 3, 2009 Investment (BMIIC); Bank Melli Printing and Publishing; Melli Investment Holding; Mehr Cayman Ltd.; Cement Investment and Development; Mazandaran Cement Co.; Shomal Cement; Mazandaran Textile; Melli Agrochemical; First Persian Equity Fund; BMIIC Intel. General Trading Entities Sanctioned under Executive Order 13224 (Terrorism Entities) Qods Force October 21, 2007 Bank Saderat (allegedly used to funnel Iranian October 21, 2007 money to Hezbollah, Hamas, PIJ, and other Iranian supported terrorist groups) Al Qaeda Operatives in Iran: Saad bin Laden; Jan. 16, 2009 Mustafa Hamid; Muhammad Rab‘a al-Bahtiyti;

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Alis Saleh Husain Entities Sanctioned under the Iran Non-Proliferation Act and other U.S. Proliferation Laws Norinco (China). For alleged missile May 2003 technology sale to Iran. Taiwan Foreign Trade General Corporation July 4, 2003 (Taiwan) Tula Instrument Design Bureau (Russia). For Sept. 17, 2003 alleged sales of laser-guided artillery shells to Iran. 13 entities sanctioned including companies April 7, 2004 from Russia, China, Belarus, Macedonia, North Korea, UAE, and Taiwan. 14 entities from China, North Korea, Belarus, September 29, 2004 India (two nuclear scientists, Dr. Surendar and Dr. Y.S.R. Prasad), Russia, Spain, and Ukraine. 14 entities, mostly from China, for alleged supplying of Iran‘s missile program. Many, December 2004 and January 2005 such as North Korea‘s Changgwang Sinyong and China‘s Norinco and Great Wall Industry Corp, have been sanctioned several times previously. Newly sanctioned entities included North Korea‘s Paeksan Associated Corporation, and Taiwan‘s Ecoma Enterprise Co. 9 entities, including those from China (Norinco yet again), India (two chemical companies), and Austria. Sanctions against Dr. Surendar of India December 26, 2005 (see September 29, 2004) were ended, presumably because of information exonerating him

7 entities. Two Indian chemical companies (Balaji Amines and Prachi Poly Products); two Russian firms (Rosobornexport and aircraft manufacturer Sukhoi); two North Korean entities (Korean Mining and Industrial Development, and Korea Pugang Trading); and one Cuban entity (Center for Genetic Engineering and Biotechnology). 9 entities. Rosobornesksport, Tula Design, and Komna Design Office of Machine Building, and Alexei Safonov (Russia); Zibo Chemical, China National Aerotechnology, and China National Electrical (China). Korean Mining and Industrial Development (North Korea) for WMD or advanced weapons sales to Iran (and Syria). 14 entities, including Lebanese Hezbollah. Some were penalized for transactions with Syria. Among the new entities sanctioned for assisting Iran were Shanghai Non-Ferrous Metals Pudong Development Trade Company (China); Iran‘s Defense Industries Organization; Sokkia Company (Singapore); Challenger Corporation (Malaysia); Target

August 4, 2006

January 2007

April 23, 2007

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Table 3. (Continued) Entities Sanctioned under the Iran Non-Proliferation Act and other U.S. Proliferation Laws Airfreight (Malaysia); Aerospace Logistics Services (Mexico); and Arif Durrani (Pakistani national). 13 entities: China Xinshidai Co.; China Shipbuilding and Offshore International Corp.; Huazhong CNC (China); IRGC; Korea Mining October 23, 2008 Development Corp. (North Korea); Korea Taesong Trading Co. (NK); Yolin/Yullin Tech, Inc. (South Korea); Rosoboronexport (Russia sate arms export agency); Sudan Master Technology; Sudan Technical Center Co; Army Supply Bureau (Syria); R and M International FZCO (UAE); Venezuelan Military Industries Co. (CAVIM); Entities Designated as Threats to Iraqi Stability under Executive Order 13438 Ahmad Forouzandeh. Commander of the Qods January 9, 2008 Force Ramazan Headquarters, accused of fomenting sectarian violence in Iraq and of organizing training in Iran for Iraqi Shiite militia fighters Abu Mustafa al-Sheibani. Iran based leader of January 9, 2008 network that funnels Iranian arms to Shiite militias in Iraq. Isma‘il al-Lami (Abu Dura). Shiite militia January 9, 2008 leader, breakaway from Sadr Mahdi Army, alleged to have committed mass kidnapings and planned assassination attempts against Iraqi Sunni politicians Mishan al-Jabburi. Financier of Sunni January 9, 2008 insurgents, owner of pro-insurgent Al-Zawra television, now banned Al Zawra Television Station January 9, 2008 Khata‘ib Hezbollah (pro-Iranian Mahdi splinter July 2, 2009 group) Abu Mahdi al-Muhandis July 2, 2009

End Notes 1

The definition of ―investment‖ in ISA (Section 14 (9)) includes not only equity and royalty arrangements (including additions to existing investment, as added by P.L. 107-24) but any contract that includes ―responsibility for the development of petroleum resources‖ of Iran, interpreted to include pipelines to or through Iran. The definition excludes sales of technology, goods, or services for such projects, and excludes financing of such purchases. For Libya, the threshold was $40 million, and sanctionable activity included export to Libya of technology banned by Pan Am 103-related Security Council Resolutions 748 (March 31, 1992) and 883 (November 11, 1993). For Iran, the threshhold dropped to $20 million, from $40 million, one year after enactment, when U.S. allies did not join a multilateral sanctions regime against Iran. 2 This latter ―trigger‖ was added by P.L. 109-293. 3 This latter termination requirement added by P.L. 109-293 4 Dollar figures for investments in Iran represent public estimates of the amounts investing firms are expected to spend over the life of a project, which might in some cases be several decades.

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Stern, Roger. ―The Iranian Petroleum Crisis and United States National Security,‖ Proceedings of the National Academy of Sciences of the United States of America. December 26, 2006. 6 Askari, Hossein and Trita Parsi. ―Throwing Ahmadinejad a Lifeline.‖ New York Times op-ed. August 15, 2009. 7 Blas, Javier, Carola Hoyas, and Daniel Dombey. ―Chinese Companies Supply Iran With Petrol.‖ Financial Times, September 23, 2009. 8 An August 1997 amendment to the trade ban (Executive Order 13059) prevented U.S. companies from knowingly exporting goods to a third country for incorporation into products destined for Iran. 9 ―Iran Says Halliburton Won Drilling Contract.‖ Washington Times, January 11, 2005. 10 Prada, Paulo, and Betsy McKay. Trading Outcry Intensifies. Wall Street Journal, March 27, 2007; Brush, Michael. Are You Investing in Terrorism? MSN Money, July 9, 2007. 11 Hearing of the Financial Services and General Government Subcommittee of the House Appropriations Committee, Federal News Service, May 21, 2009. 12 Mufson, Steven and Robin Wright. ―Iran Adapts to Economic Pressure.‖ Washington Post, October 29, 2007. 13 Kessler, Glenn. ―U.S. Moves to Isolate Iranian Banks.‖ Washington Post, September 9, 2006. 14 Such laws include the Atomic Energy Act of 1954 and the Energy Policy Act of 2005 (P.L. 109-58). 15 The provision contains certain exceptions to ensure the safety of astronauts, but it nonetheless threatened to limit U.S. access to the international space station after April 2006, when Russia started charging the United States for transportation on its Soyuz spacecraft. Legislation in the 109th Congress (S. 1713, P.L. 109-112) amended the provision in order to facilitate continued U.S. access and extended INA sanctions provisions to Syria. 16 Warrick, Joby. ―Iran Using Fronts to Get Bomb Parts From U.S.‖ Washington Post, January 11, 2009; Institute for Science and International Security. ―Iranian Entities‘ Illicit Military Procurement Networks.‖ David Albright, Paul Brannan, and Andrea Scheel. January 12, 2009. 17 For information on the steps taken by individual states, see National Conference of State Legislatures. State Divestment Legislation. 18 Rhoads, Christopher. ―Iran‘s Web Spying Aided by Western Technology.‖ Wall Street Journal, June 22, 2009. 19 See CRS Report RL3 1258, Suits Against Terrorist States by Victims of Terrorism, by Jennifer K. Elsea.

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In: Nuclear Ambitions and Issues in the Middle East Editor: Nathan E. Cohen

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Chapter 3

PAKISTAN’S NUCLEAR WEAPONS: PROLIFERATION AND SECURITY ISSUES 

Paul K. Kerr and Mary Beth Nikitin

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SUMMARY Pakistan‘s nuclear arsenal consists of approximately 60 nuclear warheads, although it could be larger. Islamabad is producing fissile material, adding to related production facilities, and deploying additional delivery vehicles. These steps will enable Pakistan to undertake both quantitative and qualitative improvements to its nuclear arsenal. Whether and to what extent Pakistan‘s current expansion of its nuclear weapons-related facilities is a response to the 2008 U.S.-India nuclear cooperation agreement is unclear. Islamabad does not have a public, detailed nuclear doctrine, but its ―minimum credible deterrent‖ is widely regarded as primarily a deterrent to Indian military action. Pakistan has in recent years taken a number of steps to increase international confidence in the security of its nuclear arsenal. In addition to dramatically overhauling nuclear command and control structures since September 11, 2001, Islamabad has implemented new personnel security programs. Moreover, Pakistani and some U.S. officials argue that, since the 2004 revelations about a procurement network run by former Pakistani nuclear official A.Q. Khan, Islamabad has taken a number of steps to improve its nuclear security and to prevent further proliferation of nuclear-related technologies and materials. A number of important initiatives, such as strengthened export control laws, improved personnel security, and international nuclear security cooperation programs have improved Pakistan‘s security situation in recent years. Instability in Pakistan has called the extent and durability of these reforms into question. Some observers fear radical takeover of a government that possesses a nuclear bomb, or proliferation by radical sympathizers within Pakistan‘s nuclear complex in case of a 

This is an edited, reformatted and augmented version of a CRS Report for Congress publication dated October 2009.

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breakdown of controls. While U.S. and Pakistani officials continue to express confidence in controls over Pakistan‘s nuclear weapons, continued instability in the country could impact these safeguards. For a broader discussion, see CRS Report RL33498, Pakistan-U.S. Relations, by K. Alan Kronstadt. This report will be updated.

BACKGROUND Chronic political instability in Pakistan and the current offensive against the Taliban in the northwest of the country have called attention to the issue of the security of the country‘s nuclear weapons. Some observers fear that Pakistan‘s strategic nuclear assets could be obtained by terrorists, or used by elements in the Pakistani government. Chair of the Joint Chiefs of Staff Admiral Michael Mullen described U.S. concern about the matter during a September 22, 2008, speech:

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To the best of my ability to understand it—and that is with some ability—the weapons there are secure. And that even in the change of government, the controls of those weapons haven't changed. That said, they are their weapons. They're not my weapons. And there are limits to what I know. Certainly at a worst-case scenario with respect to Pakistan, I worry a great deal about those weapons falling into the hands of terrorists and either being proliferated or potentially used. And so, control of those, stability, stable control of those weapons is a key concern. And I think certainly the Pakistani leadership that I've spoken with on both the military and civilian side understand that.

U.S. officials continue to be concerned about the existential threat posed by nuclear weapons in a destabilized Pakistan. General David H. Petraeus, Commander, U.S. Central Command, testified March 31, 2009, that ―Pakistani state failure would provide transnational terrorist groups and other extremist organizations an opportunity to acquire nuclear weapons and a safe haven from which to plan and launch attacks.‖ Nevertheless, U.S. officials have generally expressed confidence in the security of Pakistan‘s nuclear weapons. President Obama addressed this issue in an April 29, 2009, press conference, stating, ―I‘m confident that we can make sure that Pakistan‘s nuclear arsenal is secure, primarily, initially, because the Pakistani army, I think, recognizes the hazards of those weapons falling into the wrong hands. We've got strong military-to-military consultation and cooperation.‖ He also recognized the sensitivity of the issue for Pakistan, saying, ―We want to respect their sovereignty, but we also recognize that we have huge strategic interests, huge national security interests in making sure that Pakistan is stable and that you don't end up having a nuclear-armed militant state.‖1 Declining to engage in ―hypotheticals‖ when asked if the United States is ready to secure the nuclear arsenal if the Pakistani government could not do so, President Obama said he felt ―confident that that nuclear arsenal will remain out of militant hands.‖ General Petraeus reaffirmed this confidence on May 10: ―With respect to the—the nuclear weapons and—and sites that are controlled by Pakistan ... we have confidence in their security procedures and elements and believe that the security of those sites is adequate.‖2 Admiral Mullen echoed this assessment during a May 14, 2009, hearing before the Senate Armed Services Committee, but added that ―we‘re limited in what we actually know‖ about

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Islamabad‘s nuclear arsenal.‖ Leon Panetta, Director of the Central Intelligence Agency, similarly acknowledged in a May 18 speech that the United States does not possess the intelligence to locate all of Pakistan‘s nuclear weapons-related sites. Pakistani efforts to improve the security of its nuclear weapons have been on-going and include some cooperation with the United States. Since the 1998 Pakistani and Indian nuclear tests, the international community has increased attention to reducing the risk of nuclear war in South Asia. The two countries most recently came to the brink of full-scale war in 1999 and 2002, and, realizing the dangers, have developed some risk reduction measures to prevent accidental nuclear war. Islamabad has also developed its command and control systems and improved security of military and civilian nuclear facilities. Since the 2004 revelations of an extensive international nuclear proliferation network run by Pakistani nuclear official Abdul Qadeer Khan, as well as possible connections between Pakistani nuclear scientists and Al Qaeda, Islamabad has made additional efforts to improve export controls and monitor nuclear personnel. The main security challenges for Pakistan‘s nuclear arsenal are keeping the integrity of the command structure, ensuring physical security, and preventing illicit proliferation from insiders. Pakistan continues to produce fissile material for weapons and appears to be augmenting its weapons production facilities, as well as deploying additional delivery vehicles—steps that will enable both quantitative and qualitative improvements in Islamabad‘s nuclear arsenal.

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Nuclear Weapons Pakistan‘s nuclear energy program dates back to the 1950s, but it was the loss of East Pakistan (now Bangladesh) in a bloody war with India that probably triggered a political decision in January 1972 (just one month later) to begin a secret nuclear weapons program.3 Deterring India‘s nuclear weapons and augmenting Pakistan‘s inferior conventional forces are widely believed to be the primary missions for Islamabad‘s nuclear arsenal. Observers point to India‘s 1974 ―peaceful‖ nuclear explosion as the pivotal moment that gave additional urgency to the program. Pakistan produced fissile material for its nuclear weapons using gascentrifuge-based uranium enrichment technology, which it mastered by the mid-1980s. Highly-enriched uranium (HEU) is one of two types of fissile material used in nuclear weapons; the other is plutonium. The country‘s main enrichment facility is a centrifuge plant located at Kahuta; Pakistan may have other enrichment sites.4 Islamabad gained technology from many sources. This extensive assistance is reported to have included, among other things, uranium enrichment technology from Europe, blueprints for a small nuclear weapon from China, and missile technology from China. The United States had information during the 1970s and early 1980s that Pakistan was pursuing nuclear weapons designs,5 but exactly when Pakistan produced a workable nuclear explosive device is unclear. A 1985 National Intelligence Council report stated that Pakistan ―probably has a workable design for a nuclear explosive device‖ and was ―probably ... a year or two away from a capacity to produce enough‖ highly enriched uranium for such a device. A 1993 National Security Council report to Congress stated that Islamabad‘s nuclear weapons efforts ―culminated with the capability to rapidly assemble a nuclear device if necessary by the end of the 1 980s.‖6 A.Q. Khan stated in an interview published in May 1998 that

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Islamabad ―attained‖ the capability to detonate such a device ―at the end of 1984.‖7 In any case, President Bush‘s failure to certify in 1990 that Pakistan did not ―possess a nuclear explosive device‖ led to a cut-off in military and financial aid under the Pressler Amendment.8 When India conducted nuclear weapon tests on May 12, 1998, Pakistan‘s government responded two weeks later on May 28 and May 30 with six tests in western Pakistan. Test yields were about 10 kilotons and 5 kilotons, according to seismic analysis.9 The United States imposed additional sanctions after the tests, but these were lifted after the September 11, 2001, terrorist attacks on the United States. According to most public estimates, Pakistan has about 60 nuclear weapons, though it could have more.10 However, a recent public estimate from two prominent experts on the subject stated that the country has between 70 and 90 nuclear weapons.11 Pakistan‘s nuclear warheads use an implosion design with a solid core of approximately 15-20 kilograms of HEU.12 Islamabad reportedly continues to produce HEU for weapons at a rate of at least 100 kilograms per year.13 Pakistan has also pursued plutonium-based warheads and continues to produce plutonium for weapons. Islamabad has received Chinese and European assistance for at least some of its plutonium program. The 40-50 megawatt heavy-water Khushab plutonium production reactor has been operating since 1998.14 It appears that Islamabad is constructing two additional heavy-water reactors, which will expand considerably Pakistan‘s plutonium production capacity, at the same site.15 Additionally, Pakistan has a reprocessing facility16 at the Pakistan Institute of Science and Technology (PINSTECH) and is apparently constructing other such facilities. Nuclear Fuel reported in 2000 that, according to ―senior U.S. government officials,‖ Islamabad had begun operating a ―pilot-scale‖ reprocessing facility at the New Laboratories facility at PINSTECH.17 Pakistan also appears to be constructing a second reprocessing facility at the site18 and may be completing a reprocessing facility located at Chasma.19 Islamabad‘s construction of additional nuclear reactors and expansion of its reprocessing capabilities could indicate plans to increase and improve Pakistan‘s nuclear weapons arsenal in the near future. Indeed, Defense Intelligence Agency Director Michael Maples told the Senate Armed Services Committee on March 10, 2009, that ―Pakistan continues to develop its nuclear infrastructure, expand nuclear weapon stockpiles and seek more advanced warheads and delivery systems.‖20 Similarly, Admiral Mullen confirmed during the May 14 hearing that the United States has ―evidence‖ that Pakistan is expanding its nuclear arsenal.

Responding to India? Pakistani officials have indicated that they have already determined the arsenal size needed for a minimum nuclear deterrent and that they will not engage in an arms race with India. Nevertheless, Pakistan appears to be increasing its fissile production capability and improving its delivery vehicles in order to hedge against possible increases in India‘s nuclear arsenal. Islamabad may also accelerate its current nuclear weapons efforts. India has stated that it needs only a ―credible minimum deterrent,‖ but New Delhi has never defined what it means by such a deterrent and has refused to sign the Comprehensive Test Ban Treaty. Furthermore, both the agreement and associated 2008 decision by the Nuclear Suppliers Group to exempt India from some of its export guidelines will renew New Delhi‘s access to the international uranium market. This access will result in more indigenous

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Indian uranium available for weapons because it will not be consumed by India‘s newly safeguarded reactors.21 Pakistani officials have stated that the government may need to increase significantly its nuclear arsenal in response to possible Indian plans to do the same. According to an April 2006 television broadcast, Pakistani officials from the government‘s National Command Authority expressed ―concern‖ that the 2008 U.S.-India nuclear cooperation agreement could tilt the strategic balance between India and Pakistan in favor of the former. The officials suggested that Islamabad may need to increase or improve its nuclear arsenal in order to ―to meet all requirements of minimum credible defence deterrence.‖22 (See the ―Nuclear Doctrine‖ section for more on Pakistan‘s deterrence concept.) Similarly, Pakistan‘s Permanent Representative to the International Atomic Energy Agency (IAEA) wrote in July 2008 that the agreement could cause a nuclear arms race between Pakistan and India.23 Moreover, a Foreign Ministry spokesperson indicated during a May 21, 2009, press briefing that, despite the government‘s continued opposition to a ―nuclear or conventional arms race in South Asia,‖ Pakistan may need to increase its nuclear arsenal in response to Indian conventional and nuclear arms expansion. Illustrating this point, a Pakistani Foreign Office spokesperson reacted to India‘s July 26, 2009, launch of its first indigenously built nuclear-powered submarine by asserting that ―continued induction of new lethal weapon systems by India is detrimental to regional peace and stability,‖ adding that ―[w]ithout entering into an arms race with India, Pakistan will take all appropriate steps to safeguard its security and maintain strategic balance in South Asia.‖ The submarine, which has not yet been deployed, will reportedly be capable of carrying nuclear-armed ballistic missiles.24 However, whether and to what extent Pakistan‘s current expansion of its nuclear weapons-related facilities is a response to the U.S.-India agreement is unclear, partly because the government‘s decisions regarding those facilities are not publicly available. In addition to making qualitative and quantitative improvements to its nuclear arsenal, Pakistan could increase the number of circumstances under which it would be willing to use nuclear weapons. For example, Peter Lavoy has argued that India‘s efforts to improve its conventional military capabilities could enable New Delhi to achieve ―technical superiority‖ in Intelligence, Surveillance, and Reconnaissance, as well as precision targeting, proving India with ―the capability to effectively locate and efficiently destroy strategically important targets in Pakistan.‖25 Islamabad could respond by lowering the threshold for using nuclear weapons, according to Lavoy. Indeed, a Pakistan Foreign Ministry spokesperson warned in May 2009 that Islamabad could take this step. (See the ―Nuclear Doctrine‖ section.) Nevertheless, Islamabad‘s nuclear weapons program apparently faces some budget constraints. Maples testified that ―the economic decline will likely slow‖ the government‘s progress in improving its nuclear and conventional military forces. Furthermore, Pakistan‘s nuclear weapons program is reportedly facing ―severe financial cuts.‖26

Delivery Vehicles Pakistan has two types of delivery vehicles for nuclear weapons: aircraft controlled by the Pakistan Air Force and surface-to-surface missiles controlled by the Pakistan Army.

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Pakistan could deliver its nuclear weapons using F-16s purchased from the United States, provided that modifications are made. It is widely believed that Islamabad has made modifications to the F-1 6s previously sold to them.27 Although concerns have been raised about the impact of these sales on the strategic balance in South Asia,28 the U.S. government maintains that the sale of additional F-16s to Pakistan will not alter the regional balance of power.29 The contract for provision of an additional 36 aircraft was signed on September 30, 2006, as was the contract for the weapons for those aircraft and a contract to perform the midlife upgrade on Pakistan‘s F-1 6A/B model aircraft. Pakistan‘s F-16 fleet will therefore be expanded, but it is unclear what portion of the fleet will be capable of a nuclear mission. Mirage III and V aircraft could also be used, although would have limited range. A-5 ‘s may have been modified to carry a nuclear payload. 30 After India‘s first test of its Prithvi ballistic missile in 1988, Pakistan jump-started its own missile program and has three types of ballistic missiles thought to be nuclear-capable: the solid-fuel Hatf-III (Ghaznavi), with a range of about 400 kilometers; the solid-fuel HatfIV (Shaheen), with a range of over 450 kilometers31; and the liquid-fuel Hatf-V (Ghauri), with an approximate range of almost 1 ,300 kilometers.32 33 The solid-fuel Hatf- VI (Shaheen-2) missile, when deployed, will be ―capable of reaching targets out to 2,000 kilometers,‖ Maples stated March 10,34 adding that Islamabad has made ―significant progress‖ on the missile. A 2009 National Air and Space Intelligence Center report appears to support this conclusion, stating that the missile ―probably will soon be deployed.‖ Islamabad continues to carry out ballistic missile tests, but notifies India in advance in accordance with an October 2005 bilateral missile pre-notification pact.35 Maples also indicated that Pakistan is developing nuclear-capable cruise missiles; the Babur (ground- launched) and the Ra’ad (air-launched), both of which will have estimated ranges of 320 kilometers.36

Nuclear Doctrine Pakistan‘s strategic doctrine is undeclared, and will probably remain so, but prominent officials and analysts have offered insights concerning its basic tenets.37 Describing the guiding principle as minimum credible nuclear deterrence, high-level officials‘ statements point to four policy objectives for Islamabad‘s nuclear weapons: deter all forms of external aggression; deter through a combination of conventional and strategic forces; deter counterforce strategies by securing strategic assets and threatening nuclear retaliation; and stabilize strategic deterrence in South Asia.38 Pakistani officials have also indicated that this nuclear posture is designed to preserve territorial integrity against Indian attack, prevent military escalation, and counter its main rival‘s conventional superiority.39 Pakistan has pledged no-first-use against non-nuclear-weapon states, but has not ruled out first- use against a nuclear-armed aggressor, such as India.40 Some analysts say this ambiguity serves to maintain deterrence against India‘s conventional superiority; the Foreign Ministry spokesperson stated May 21 that ―there are acquisitions of sophisticated weaponry by our neighbour which will disturb the conventional balance between our two countries and hence, lower the nuclear threshold.‖ Other analysts argue that keeping the first-use option against New Delhi allows Islamabad to conduct sub-conventional operations, such as support for low intensity conflict or proxy war in Kashmir, while effectively deterring India at the strategic

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level.41 Pakistan has reportedly addressed issues of survivability through pursuing a second strike capability, possibly building hard and deeply buried storage and launch facilities, deploying road-mobile missiles, deploying air defenses around strategic sites, and utilizing concealment measures.42

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Command and Control Pakistan‘s command and control over its nuclear weapons is compartmentalized and includes strict operational security. The government‘s command and control system is based on ―C4I2SR‖ (command, control, communication, computers, intelligence, information, surveillance and reconnaissance). Islamabad‘s Strategic Command Organization has a threetiered structure, consisting of the National Command Authority (NCA), the Strategic Plans Division (SPD), and the Strategic Forces Commands. The NCA supervises the functions and administration of all of Pakistan‘s organizations involved in nuclear weapons research, development, and employment, as well as the military services that operate the strategic forces.43 The President is Chairperson of the NCA; the Prime Minister is the Vice-Chairperson. The NCA also includes the chair of the joint chiefs of staff, the Ministers of Defense, Interior, and Finance, the Director- General of the SPD, and the Commanders of the Army, Air Force, and Navy. The final authority to launch a nuclear strike requires consensus within the NCA; the Chairperson must cast the final vote. The NCA is comprised of two committees, the Employment Control Committee (ECC) and the Development Control Committee (DCC), each of which includes a mix of civilian and military officials. The ECC‘s functions include establishing a command and control system over the use of nuclear weapons. The DCC ―exercises technical, financial and administrative control over all strategic organisations, including national laboratories and research and development organisations associated with the development and modernisation of nuclear weapons.‖44 The SPD is headed by a Director General from the Army and acts as the secretariat for the NCA. The SPD‘s functions include formulating Islamabad‘s nuclear policy, strategy, and doctrine; developing the nuclear chain of command; and formulating operational plans at the service level for the movement, deployment, and use of nuclear weapons. The Army, Air Force, and Navy each have their own strategic force command, but operational planning and control remains with the NCA. The SPD coordinates operational plans with the strategic forces commands. According to current and former Pakistani officials, Islamabad employs a system which requires that at least two, and perhaps three, people authenticate launch codes for nuclear weapons. 45 On December 13, 2007, President Musharraf formalized these authorities and structure in the ―National Command Authority Ordinance, 2007.‖46 The NCA was established by administrative order, but now has a legal basis. Analysts point out that the timing of this ordinance was meant to help the command and control system weather political transitions and potentially preserve the military‘s strong control over the system. The ordinance also addresses the problems of the proliferation of nuclear expertise and personnel reliability. It outlines punishable offenses related to breach of confidentiality or leakage of ―secured information,‖ gives the SPD authority to investigate suspicious conduct, states that

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punishment for these offenses can be up to 25 years imprisonment, and applies to both serving and retired personnel, including military personnel, notwithstanding any other laws. As a result, Pakistani authorities say that the ordinance should strengthen their control over strategic organizations and their personnel.

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Security Concerns According to a 2001 Department of Defense report, Islamabad‘s nuclear weapons ―are probably stored in component form,‖47 which suggests that the nuclear warheads are stored separately from delivery vehicles. According to some reports, the fissile cores of the weapons are separated from the non-nuclear explosives.48 But whether this is actually the case is unclear; one report states that the warheads and delivery vehicles are probably stored separately in facilities close to one another, but says nothing about the fissile cores.49 And, according to an account of a 2008 experts‘ group visit to Pakistan, Lt. Gen. Khalid Kidwai, the head of the SPD, suggested that the nuclear warheads (containing the fissile cores) may be mated with their delivery vehicles.50 According to Kidwai, the report says, the SPD‘s official position is that the weapons ―will be ready when required, at the shortest notice; [but] the Pakistani doctrine is not endorsing a US-USSR model with weapons on hair trigger alert.‖ The 2001 Defense Department report says that Pakistan can probably assemble its weapons fairly quickly.51 Although separate storage may provide a layer of protection against accidental launch or prevent theft of an assembled weapon, it may be easier for unauthorized people to remove a weapon‘s fissile material core if it is not assembled. Dispersal of the assets may also create more potential access points for acquisition and may increase the risk of diversion.52 As the United States prepared to launch an attack on the Afghan Taliban after September 11, 2001, President Musharraf reportedly ordered that Pakistan‘s nuclear arsenal be redeployed to ―at least six secret new locations.‖53 This action came at a time of uncertainly about the future of the region, including the direction of U.S.-Pakistan relations. Islamabad‘s leadership was uncertain whether the United States would decide to conduct military strikes against Pakistan‘s nuclear assets if the government did not assist the United States against the Taliban. Indeed, President Musharraf cited protection of Pakistan‘s nuclear and missile assets as one of the reasons for Islamabad‘s dramatic policy shift.54 These events, in combination with the 1999 Kargil crisis, the 2002 conflict with India at the Line of Control, and revelations about the A.Q. Khan proliferation network, inspired a variety of reforms to secure the nuclear complex. Risk of nuclear war in South Asia ran high in the 1999 Kargil crisis, when the Pakistani military is believed to have begun preparing nuclear-tipped missiles.55 It should be noted that, even at the high alert levels of 2001 and 2002, there were no reports of Pakistan mating the warheads with delivery systems.56 In the fall of 2007 and early 2008, some observers expressed concern about the security of the country‘s arsenal if political instability were to persist.57 Former Prime Minister Benazir Bhutto said in an interview on November 5, 2007, that while President Musharraf says he is firm control of the nuclear arsenal, she is afraid this control could weaken due to instability in the country.58 Similarly, Michael Krepon of the Henry L. Stimson Center has argued that ―a prolonged period of turbulence and infighting among the country‘s President,

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Prime Minister, and Army Chief‖ could jeopardize the army‘s unity of command, which ―is essential for nuclear security.‖59 During that time, U.S. military officials also expressed concern about the security of Pakistan‘s nuclear weapons.60 Director General of the International Atomic Energy Agency (IAEA), Mohamed ElBaradei, also has expressed fears that a radical regime could take power in Pakistan, and thereby acquire nuclear weapons.61 Experts also worry that while nuclear weapons are currently under firm control, with warheads disassembled, technology could be sold off by insiders during a worsened crisis.62 However, U.S. intelligence officials have expressed greater confidence regarding the security of Islamabad‘s nuclear weapons. Deputy Secretary of State John D. Negroponte in testimony to Congress on November 7, 2007 said he believed that there is ―plenty of succession planning that‘s going on in the Pakistani military‖ and that Pakistan‘s nuclear weapons are under ―effective technical control.‖63 Similarly, Donald Kerr, Principal Deputy Director of National Intelligence, told a Washington audience May 29, 2008, that the Pakistani military‘s control of the country‘s nuclear weapons is ―a good thing because that‘s an institution in Pakistan that has, in fact, withstood many of the political changes over the years.‖ A Department of Defense spokesperson told reporters December 9, 2008, that Washington has ―no reason at this point to have any concern with regards to the security‖ of Islamabad‘s nuclear arsenal. More recently, Maples stated March 10 that Islamabad ―has taken important steps to safeguard its nuclear weapons,‖ but also pointed out that ―vulnerabilities exist.‖ Other governments have also voiced opinions regarding the security of Pakistan‘s nuclear arsenal. For example, Indian National Security Adviser M. K. Narayanan said that the arsenal is safe and has adequate checks and balances.64 Similarly, Secretary of State for Foreign and Commonwealth Affairs David Miliband told the Charlie Rose Show December 15, 2008, that Islamabad‘s nuclear weapons ―are under pretty close lock and key.‖ Russian Deputy Prime Minister Sergei Ivanov, however, sounded somewhat less optimistic in a March 24, 2009, television interview, stating that Moscow is ―very much concerned‖ about the security of Pakistan‘s arsenal.65 Pakistani officials have consistently expressed confidence in the security of the country‘s nuclear arsenal. Then-President Musharraf stated in November 2007 that Pakistan‘s nuclear weapons are under ―total custodial controls.‖66 More recently, President Asif Ali Zardari told CNN December 2, 2008, that the country‘s nuclear command and control system ―is working well.‖ Additionally, a Pakistani Foreign Ministry spokesperson stated May 21, 2009, that ―there is simply no question of our strategic assets falling into the wrong hands. We have full confidence in our procedures, mechanisms and command and control systems.‖ In addition to the above scenarios, the security of Pakistan‘s nuclear weapons could also be jeopardized by another conflict between India and Pakistan, Michael Krepon argued, explaining that an ―escalating war with nuclear forces in the field would increase the probability of accidents, miscalculations, and the use of nuclear weapons.‖ This is because [w]hen tensions rise precipitously with India, the readiness level of Pakistan‘s nuclear deterrent also rises. Because the geographical coordinates of Pakistan‘s main nuclear weapon storage sites, missile, and air bases can be readily identified from satellites—and therefore targeted by opposing forces—the dictates of deterrence mandate some movement of launchers and weapons from fixed locations during crises. Nuclear weapons on the move are inherently

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less secure than nuclear weapons at heavily-guarded storage sites. Weapons and launchers in motion are also more susceptible to ―insider‖ threats and accidents.67

Such a war, Krepon added, would also place stress on the army‘s unity of command. Krepon has also pointed out that Islamabad faces a dilemma, because less-dispersed nuclear weapons may be more vulnerable to a disarming military strike from India.68 U.S. plans to secure Pakistani nuclear weapons in case of a loss of control by the Pakistani government were famously addressed during Secretary of State Condoleezza Rice‘s confirmation hearing in January 2005. In response to a question from Senator John Kerry asking what would happen to Pakistan‘s nuclear weapons in the event of a radical Islamic coup in Islamabad, Secretary Rice answered, ―We have noted this problem, and we are prepared to try to deal with it.‖69 On November 12, 2007, responding to press reports about this contingency, a Pakistan Foreign Office spokesperson said, ―Pakistan possesses adequate retaliatory capacity to defend its strategic assets and sovereignty,‖ emphasizing that Islamabad‘s nuclear weapons have been under ―strong multi-layered, institutionalized decision-making, organizational, administrative and command and control structures since 1998.‖70 The issue of U.S. contingency plans to take over Pakistani strategic assets was raised again in the press following Benazir Bhutto‘s assassination, and was met with similar assurances by Pakistan‘s government.71 The United States reportedly offered Pakistan nuclear security assistance soon after September 11, 2001.72 U.S. assistance to Islamabad, which must comply with nonproliferation guidelines, has reportedly included the sharing of best practices and technical measures to prevent unauthorized or accidental use of nuclear weapons, as well as contribute to physical security of storage facilities and personnel reliability.73 Some press reports say that the United States provided Pakistan with Permissive Action Links (PALs) in 2003, although former Pakistani military officials have said Pakistan has developed PALs for its warheads without assistance.74 PALs require a code to be entered before a weapon can be detonated. As noted above, Islamabad employs a system requiring that at least two, and perhaps three, people authenticate launch codes for nuclear weapons.75 Security at nuclear sites in Islamabad is the responsibility of a 10,000- member security force, commanded by a two-star general. Former Deputy Secretary of State Richard Armitage confirmed in a November 2007 interview that there has been U.S. assistance in this area, explaining that the United States was unlikely to intervene militarily in a crisis in Pakistan because ―we have spent considerable time with the Pakistani military, talking with them and working with them on the security of their nuclear weapons. I think most observers would say that they are fairly secure. They have pretty sophisticated mechanisms to guard the security of those.‖76 Rolf Mowatt-Larssen, former Director of the Office of Intelligence and Counterintelligence at the U.S. Department of Energy, pointed out in May 2009 that ―there‘s not a lot of transparency into‖ how Islamabad spends the U.S. funds, but he nevertheless characterized them as ―money well spent.‖77 The U.S. government has also reportedly offered assistance to secure or destroy radioactive materials that could be used to make a radioactive dispersal device, and to ship highly enriched uranium used in the Pakistani civilian nuclear sector out of the country.78 It is not clear what Pakistan‘s response has been to these proposals.

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It is worth noting that, according to some observers, spent fuel from Pakistan‘s Karachi and Chasma nuclear power plants could be vulnerable to theft or attack.79 Pakistani officials have expressed confidence in the security of its facilities, however.80

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Proliferation Threat Many observers are concerned that other states or terrorist organizations could obtain material or expertise related to nuclear weapons from Pakistan.81 Beginning in the 1970s, Pakistan used clandestine procurement networks to develop its nuclear weapons program. Former Pakistani nuclear official A.Q. Khan subsequently used a similar network to supply Libya, North Korea, and Iran with materials related to uranium enrichment.82 Al-Qaeda has also sought assistance from the Khan network. According to former Director of Central Intelligence George Tenet, the United States ―received fragmentary information from an intelligence service‖ that in 1998 Osama bin Laden had ―sent emissaries to establish contact‖ with the network.83 Other Pakistani sources could also provide nuclear material to terrorist organizations. According to a 2005 report by the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction, alQaeda ―had established contact with Pakistani scientists who discussed development of nuclear devices that would require hardto-obtain materials like uranium to create a nuclear explosion.‖84 Tenet explains that these scientists were affiliated with a different organization than the Khan network. The current status of Pakistan‘s nuclear export network is unclear, although most official U.S. reports indicate that, at the least, it has been damaged considerably. Director of National Intelligence John D. Negroponte implied that the network had been dismantled when he asserted in a January 11, 2007, statement to the Senate Select Committee on Intelligence that ―Pakistan had been a major source of nuclear proliferation until the disruption of the A.Q. Khan network.‖85 More recently, a January 12, 2009, State Department press release said that the network ―is no longer operating.‖ For its part, Pakistan‘s Foreign Office stated February 7, 2009, that Pakistan ―has dismantled the nuclear black market network.‖ Asked during a July 20, 2009, interview whether North Korea was transferring ―nuclear weapons‖ or related advice to North Korea, Secretary of State Hillary Clinton replied that there is ―no evidence‖ that Pakistan is doing so. However, when asked about the network‘s current status during a July 25, 2007, Senate Foreign Relations Committee hearing, Undersecretary for Political Affairs Nicholas Burns replied that: I cannot assert that no part of that network exists, but it‘s my understanding based on our conversations with the Pakistanis that the network has been fundamentally dismantled. But to say that there are no elements in Pakistan, I‘m not sure I could say that.

Similarly, the London-based International Institute for Strategic Studies found in a May 2007 report that ―at least some of Khan‘s associates appear to have escaped law enforcement attention and could ... resume their black-market business.‖86 Asked about Pakistan‘s cooperation in investigating the network, Burns acknowledged that the United States has not had ―personal, consistent access‖ to Khan, but added that he did

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not ―have all the details of everything we‘ve done.‖ Similarly, the IAEA has not yet been able to interview Khan directly, according to an agency official. However, Islamabad has responded to written questions from the IAEA and has been cooperative with the agency‘s investigation of Iran‘s nuclear program.87 Khan himself told Dawn News TV May 29, 2008, that he would not cooperate with U.S. or IAEA investigators. A Pakistani Foreign Office spokesperson told reporters in May 2006 that the government considered the Khan investigation ―closed‖—a position an Office spokesperson reiterated February 6, 2009. The State Department announced January 12, 2009, that it was imposing sanctions on 13 individuals and three companies for their involvement in the Khan network. The sanctions were imposed under the Export-Import Bank Act, the Nuclear Proliferation Prevention Act, and Executive Orders 12938 and 13382.

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Pakistan’s Response to the Proliferation Threat Undersecretary Burns testified in July 2007 that the Bush administration has ―told the Pakistani government that it is its responsibility ... to make sure‖ that neither the Khan network nor a ―similar organization‖ resurfaces in the country. Since the revelations about the Khan network, Pakistan appears to have increased its efforts to prevent nuclear proliferation. But whether and to what extent these efforts have been successful is not yet clear. It is worth noting that, because Khan conducted his proliferation activities as a government official, they do not necessarily indicate a failure of Islamabad‘s export controls. Pakistani officials argue that Islamabad has taken a number of steps to prevent further proliferation of nuclear-related technologies and materials.88 For example, Islamabad adopted in September 2004 new national export controls legislation which includes a requirement that the government issue control lists for ―goods, technologies, material, and equipment which may contribute to designing, development, stockpiling, [and] use‖ of nuclear weapons and related delivery systems. According to a February 2008 presentation by Zafar Ali, Director of Pakistan‘s Strategic Export Controls Division (SECDIV),89 the lists, which were issued in October 2005 and are to be periodically updated, include items controlled by multilateral export control regimes, such as the Nuclear Suppliers Group, the Australia Group, and the Missile Technology Control Regime.90 The export controls legislation also includes a catchall clause, which requires exporters to notify the government if they are aware or suspect that goods or technology are intended by the end-user for use in nuclear or biological weapons, or missiles capable of delivering such weapons.91 The legislation includes several other important elements, such as end-use and end-user certification requirements and new penalties for violators. Since its adoption, Pakistan has established the SECDIV and an associated Oversight Board. The SECDIV is responsible for formulating rules and regulations for implementing the legislation. The board is comprised of officials from multiple agencies and is headed by Pakistan‘s Foreign Secretary. Islamabad says that it has also taken several other steps to improve its nuclear security. For example, the government announced in June 2007 that it is ―implementing a National Security Action Plan with the [IAEA‘s] assistance.‖ That same month, Pakistan also joined the U.S.- and Russian-led Global Initiative to Combat Nuclear Terrorism. As noted above, the

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December 2007 National Command Authority Ordinance also includes measures to prevent the spread of nuclear- related materials and expertise. Pakistani officials participating in an April 2007 Partnership for Global Security workshop argued that Islamabad has improved the reliability of its nuclear personnel by, for example, making security clearance procedures more stringent. However, the officials also acknowledged that Islamabad still needs to do more to control its nuclear expertise.92 Similarly, Admiral Mullen stated May 14, 2009, that the country‘s personnel reliability system must ―continue to improve.‖ The United States has also provided export control assistance to Pakistan. Burns described several such efforts in his July 2007 testimony.93 And according to an October 2007 U.S. Government Accountability Office report, Islamabad was during FY2003-FY2006 the second-largest recipient of bilateral U.S. assistance designed to improve target countries‘ export controls. Pakistan received such assistance from the Departments of State, Energy, and Homeland Security.94 Under Secretary of State for Arms Control and International Security-Designate Ellen Tauscher told the Senate Foreign Relations Committee that the Obama administration does not support conditioning aid to Pakistan on permitting direct U.S. access to Khan, arguing, in part, that the United States has ―obtained a great deal of information about the Khan network without having direct access to A.Q. Khan.‖95

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ISSUES FOR CONGRESS Members of Congress have also expressed concerns regarding the security of Pakistan‘s nuclear weapons and related material. Senator Richard Lugar has spoken out in favor of using the cooperative threat reduction tools in Pakistan to help with the security of nuclear, biological, and chemical materials and weapons in the country.96 Additionally, a number of pieces of legislation appear designed to influence Islamabad‘s policies regarding the Khan network. Section 2 of H.R. 1463, which was introduced March 12, 2009, and referred to the House Foreign Affairs Committee the same day, states that U.S. military assistance may be provided to Pakistan only if the President certifies that Islamabad is both making A.Q. Khan available to the United States for questioning and ―providing adequate assurances to the United States Government that it will monitor Khan‘s movements and activities in such a manner as to prevent his participation in any efforts to disseminate nuclear technology or know-how.‖ This section allows the President to waive restrictions on U.S. assistance imposed pursuant to the proposed legislation if the President ―certifies to Congress that it is in the national interests of the United States to do so.‖ H.R. 2481, the United States-Pakistan Security and Stability Act, which was introduced May 19, 2009, and referred the same day to the House Foreign Affairs Committee, the House Armed Services Committee, and the House Intelligence Committee, would require the President to ―develop and transmit to the appropriate congressional committees a comprehensive interagency strategy and implementation plan for long-term security and stability in Pakistan.‖ The strategy is to include a ―description of how United States assistance‖ authorized by the bill ―will be used to achieve the objectives of United States policy toward Pakistan,‖ one of which is ―to empower and enable‖ Islamabad to ―maintain

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robust command and control over its nuclear weapons technology.‖ The bill would authorize foreign assistance for Pakistan, including funds for improving the government‘s counterinsurgency capability. H.R. 1886, the Pakistan Enduring Assistance and Cooperation Enhancement Act of 2009, would authorize U.S. assistance to Pakistan for a variety of purposes. These include strengthening democratic institutions and law enforcement, as well as supporting economic development, education, human rights, and heath care. The bill would also authorize additional U.S. security assistance for Islamabad. However, Section 206 of the bill places conditions on some of this assistance; it states that no U.S. military assistance shall be provided to Pakistan if the President has not made a series of determinations, one of which is that the government ―is continuing to cooperate with the United States in efforts to dismantle supplier networks relating to the acquisition of nuclear weapons related materials, including, as necessary, providing access to Pakistani nationals associated with such networks.‖ The section includes a national security waiver. The bill also requires a report to Congress that includes a ―description of Pakistan‘s efforts to prevent proliferation of nuclear-related material and expertise‖ and an ―assessment of whether assistance provided to Pakistan pursuant to this Act has directly or indirectly aided the expansion of Pakistan‘s nuclear weapons program.‖ The committee report underlines continuing concerns about getting full information about the activities of the Khan network and development of Pakistan‘s own nuclear arsenal: Pakistan‘s history of nuclear development and Dr. Abdul Qadeer Khan‘s establishment of a nuclear proliferation network remain a source for concern to many in the United States, particularly since the Committee understands that representatives of the United States have not interviewed certain individuals involved in the network. The Committee believes the United States should continue to engage the Government of Pakistan on the network, and should, as necessary, obtain direct access to the individuals covered by this subsection, including Dr. Khan. The Committee also maintains strong concerns regarding recent reports of Pakistan expansion of its nuclear arsenal. Given the expanding threat of Pakistan‘s domestic insurgency, the Government of Pakistan‘s further development of nuclear materials appears inconsistent with its immediate security threats and is unhelpful in the context of efforts to strengthen U.S.-Pakistani relations.

H.R. 1886 was introduced April 2, 2009, and referred the same day to both the House Foreign Affairs Committee and Rules Committee. The Foreign Affairs Committee reported the bill May 22, and the Rules Committee discharged it the same day. The bill was referred to the House Armed Services Committee May 22 and discharged June 2. On June 11, the House passed H.R. 1886, which was appended to H.R. 2410, the Foreign Relations Authorization Act, Fiscal Years 2010 and 2011. H.R. 2410 has been received by the Senate and referred to the Senate Foreign Relations Committee. The Senate passed the Enhanced Partnership with Pakistan Act of 2009 (S. 962) unanimously on June 24, 2009. This bill would provide aid to Pakistan but does not include conditions regarding the nuclear nonproliferation or nuclear weapons activities. The Senate report (111-033) says that ―Any use of funds contained in this legislation for the purpose of augmenting Pakistan‘s nuclear weapons program would be directly contrary to Congressional intent.‖

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S. 1707, the Enhanced Partnership with Pakistan Act of 2009 represents a compromise between H.R. 1886 and S. 962. It passed the Senate by unanimous consent on September 24, 2009. The House passed the bill on September 30. It became public law (P.L. 111-73, 123 Stat. 2060) on October 15, 2009. Section 203 (c) of S. 1707 requires that the President certifies that Pakistan is ―continuing to cooperate with the United States in efforts to dismantle supplier networks relating to the acquisition of nuclear weapons-related materials, such as providing relevant information from or direct access to Pakistani nationals associated with such networks.‖ It also requires a SemiAnnual Monitoring Report that would include a detailed description of Pakistan‘s nuclear nonproliferation efforts and an assessment of whether assistance has ―directly or indirectly aided the expansion of Pakistan‘s nuclear weapons program, whether by the diversion of United States assistance or the reallocation of Pakistan‘s financial resources that would otherwise be spent for programs and activities unrelated to its nuclear weapons program.‖ In response to concerns expressed in Pakistan over the intent of the bill, a ―Joint Explanatory Statement‖ was submitted for the Congressional Record by Senate Foreign Relations Committee Chairman John Kerry and House Foreign Affairs Committee Chairman Howard Berman. The statement emphasizes that ―the legislation does not seek in any way to compromise Pakistan‘s sovereignty, impinge on Pakistan‘s national security interests, or micromanage any aspect of Pakistani military or civilian operations.‖ Regarding reporting requirements on nuclear nonproliferation cooperation, the statement says: The many requirements of this report are intended as a way for Congress to assess how effectively U.S. funds are being spent, shortfalls in U.S. resources that hinder the use of such funds, and steps the Government of Pakistan has taken to advance our mutual interests in countering extremism and nuclear proliferation and strengthening democratic institutions. There is no intent to, and nothing in this Act in any way suggests that there should be, any U.S. role in micromanaging internal Pakistani affairs, including the promotion of Pakistani military officers or the internal operations of the Pakistani military.97

End Notes 1

President Obama‘s 100th-Day Press Briefing transcript, April 29, 2009, accessed at http://www.nytimes.com/ 2009/04/ 29/us/politics/29text-obama.html?_r=1&pagewanted=print. 2 Interview with General David H. Petraeus, FOX News Sunday, May 10, 2009. http://www.foxnews.com/story/ 0,2933,5 19696,00.html. 3 See, for example, U.S. Department of Defense, Proliferation: Threat and Response, April 1996, p. 37. 4 Zia Mian, A.H. Nayyar, R. Rajaraman and M.V. Ramana, ―Fissile Materials in South Asia: The Implications of the U.S.-India Nuclear Deal,‖ International Panel on Fissile Materials, September 2006 and David Albright, ―Securing Pakistan‘s Nuclear Infrastructure,‖ in A New Equation: U.S. Policy toward India and Pakistan after September 11 (Washington: Carnegie Endowment for International Peace) May 2002. For a list of Pakistani nuclear facilities, see chart in Pakistan chapter of Joseph Cirincione, Jon B. Wolfsthal, and Miriam Rajkumar, Deadly Arsenals, Carnegie Endowment for International Peace, 2005. 5 See, for example, a 1978 Central Intelligence Agency report, available at http://www.faqs.org/cia/docs/44/ 0000107983/(UNTITLED)-RE.html, as well as a 1983 State Department document, available at http://www.gwu.edu/ ~nsarchiv/NSAEBB/NSAEBB1 14/chipak-11.pdf. 6 National Security Council, Report to Congress on Status of China, India and Pakistan Nuclear and Ballistic Missile Programs, 1993. Available at http://www.fas.org/irp/threat/930728-wmd.htm. 7 ―Pakistan: Qadeer Khan Interviewed on Pakistan N-Test,‖ The News, May 30, 1998.

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8

The Pressler Amendment (August 1985) linked aid and military sales to two certification conditions: (1) that Pakistan not possess a nuclear explosive device; and (2) that new aid ‗will reduce significantly the risk‘ that Pakistan will possess such a device. For background summary of sanctions legislation, see CRS Report 98486, Nuclear Sanctions: Section 102(b) of the Arms Export Control Act and Its Application to India and Pakistan, by Jeanne J. Grimmett, and CRS Report RS22757, U.S. Arms Sales to Pakistan, by Richard F. Grimmett. 9 Seismic data showed yields less than those officially announced by Pakistan and India. See Gregory van der Vink, Jeffrey Park, Richard Allen, Terry Wallace and Christel Hennet, ―False Accusations, Undetected Tests and Implications for the CTB Treaty,‖ Arms Control Today, May 1998 http://www.armscontrol.org/act/1998_05/ vimy98.asp. 10 Arms Control Association Fact Sheet, http://www.armscontrol.org/factsheets/Nuclearweaponswhohaswhat.asp; ―Global Fissile Material Report 2007,‖ International Panel on Fissile Materials http://www.fissilematerials.org/ipfm/ site_down/gfmr07.pdf; SIPRI Yearbook 2007. The International Panel on Fissile Materials estimates that Pakistan has enough fissile material (highly enriched uranium and plutonium) for 65-80 nuclear weapons; this estimate assumes 25 kilograms of HEU per weapon and 4.5-6 kilograms of plutonium per weapon (―Banning the Production of Fissile Materials for Nuclear Weapons: Country Perspectives on the Challenges to a Fissile Material (Cutoff) Treaty,‖ International Panel on Fissile Materials, 2008. http://www.fissilematerials.org/ipfm/site_down/gfmr08cv.pdf). 11 Robert Norris and Hans Kristensen, ―Nuclear Notebook: Pakistan‘s Nuclear Forces, 2009,‖ Bulletin of the Atomic Scientists, September/October 2009. 12 Robert Norris and Hans Kristensen, ―Nuclear Notebook: Pakistan‘s Nuclear Forces, 2007,‖ Bulletin of the Atomic Scientists, May/June 2007. 13 ―Global Fissile Material Report 2007.‖ 14 A Pakistani newspaper reported in April 1998 that, according to a ―top government source,‖ the reactor had begun operating (―Pakistan‘s Indigenous Nuclear Reactor Starts Up,‖ The Nation, April 13, 1998). A June 15, 2000 article cited ―U.S. officials‖ who indicated that the reactor had begun operating two years earlier (Mark Hibbs, ―After 30 Years, PAEC Fulfills Munir Khan‘s Plutonium Ambition,‖ Nucleonics Week, June 15, 2000). A 2001 Department of Defense report stated that the reactor ―will produce plutonium,‖ but did not say whether it was operating (U.S. Department of Defense, Proliferation: Threat and Response, January 2001, p. 27). 15 David Albright and Paul Brannan, ―Update on Khushab Plutonium Production Reactor Construction Projects in Pakistan,‖ Institute for Science and International Security, April 23, 2009; Mark Hibbs and Shahid-urRehman, ―Pakistan Civilian Fuel Cycle Plan Linked To NSG Trade Exception,‖ Nuclear Fuels, August 27, 2007. 16 ―Reprocessing‖ refers to the process of separating plutonium from spent nuclear fuel. 17 Hibbs, June 15, 2000. According to a 1983 State Department document, the New Laboratories facility was ―capable of extracting small quantities of plutonium,‖ but large enough to ―allow for expansion of reprocessing capacity.‖ Available at http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB114/chipak-11.pdf. 18 David Albright and Paul Brannan, ―Pakistan Expanding Plutonium Separation Facility Near Rawalpindi,‖ Institute for Science and International Security, May 19, 2009. The 2001 Defense Department report stated that reprocessing facilities ―are under construction,‖ but did not identify any sites (Proliferation: Threat and Response, p. 27). 19 David Albright and Paul Brannan, ―Chashma Nuclear Site in Pakistan with Possible Reprocessing Plant,‖ Institute for Science and International Security, January 18, 2007. Construction on the facility was begun during the 1970s with French assistance, but France cancelled its assistance for the project later that decade. 20 Norris and Kristensen explain that plutonium reactors ―provide the Pakistani military with several options: fabricating weapons that use plutonium cores, mixing plutonium with HEU to make composite cores, or using tritium to ‗boost‘ the warheads‘ yield.‖ (Norris and Kristensen, 2007). 21 See CRS Report RL33016, U.S. Nuclear Cooperation with India: Issues for Congress, by Paul K. Kerr. 22 ―Pakistan Command Meeting Voices Concern Over Indo-US Nuclear Deal,‖ Pakistan TV, April 12, 2006. 23 Available at http://verificationthoughts.blogspot.com/2008/07/indian-separation-plan.html. 24 Bappa Majumdar, ―India Launches Its First Nuclear-Powered Submarine,‖ Reuters, July 26, 2009; Nasir Jaffry, ―Pakistan Hits Out At ‗Detrimental‘ Indian Nuclear Sub,‖ Agence France Presse, July 28, 2009; ―Induction Of Indigenous Nuke Sub Into Navy Longway Off: Experts,‖ The Press Trust of India, July 26, 2009; ―NSubmarine Still Wrapped In Secrecy,‖ Indo-Asian News Service, July 27, 2009. 25 Peter Lavoy, ―Islamabad‘s Nuclear Posture: Its Premises and Implementation,‖ in Pakistan’s Nuclear Future: Worries Beyond War, Henry Sokolski, Ed. (Carlisle, PA: Strategic Studies Institute) January 2008. p. 158. 26 ―Pak Nuclear Program Faces 35% Cut,‖ The News, May 1, 2009. 27 The 1993 National Security Council report indicated that Pakistan would use these aircraft to deliver nuclear weapons. See National Security Council, Report to Congress. 28 CRS Report RL33515, Combat Aircraft Sales to South Asia: Potential Implications, by Christopher Bolkcom, Richard F. Grimmett, and K. Alan Kronstadt; Zachary Ginsburg, ―US Renews Fighter Exports to Pakistan,‖ Arms Control Today, September 2007. http://www.armscontrol.org/act/2007_09/USPakistan.asp.

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―Release of these systems would not significantly reduce India‘s quantitative or qualitative military advantage. Release of these modifications to Pakistan will neither affect the regional balance of power nor introduce a new technology as this level of capability or higher already exists in other countries in the region.‖ Defense Security and Cooperation Agency news release, June 28, 2006. http://www.dsca.mil/PressReleases/36b/2006/Pakistan_06-11.pdf. 30 CRS Report RL3 0623, Nuclear Weapons and Ballistic Missile Proliferation in India and Pakistan: Issues for Congress, by K. Alan Kronstadt. 31 Dr. Samar Mubarakmand, Chairman of Pakistan‘s National Engineering and Scientific Commission, gave the missile‘s range as 700 kilometers during a 2004 television interview (―Capital Talk Special,‖ GEO-TV, May 3, 2004). 32 National Air and Space Intelligence Center, Ballistic and Cruise Missile Threat, 2009. 33 All ballistic missiles described in this paragraph are road-mobile. 34 See also, Nuclear Notebook, ibid.; ―Worldwide Ballistic Missile Inventories,‖ Arms Control Today Fact Sheet, http://www.armscontrol.org/factsheets/missiles.asp; and Mahmud Ali Durrani, ―Pakistan‘s Strategic Thinking and the Role of Nuclear Weapons,‖ Cooperative Monitoring Center Occasional Paper 37, July 2004. http://www.cmc.sandia.gov/cmc-papers/sand2004-3375p.pdf. Mubarakmand gave the missile‘s range as 2,500 kilometers in the 2004 interview. 35 ―Agreement Between the Republic of India and the Islamic Republic of Pakistan on Pre-Notification of Flight Testing of Ballistic Missiles.‖ Full text on the Henry L. Stimson Center website: http://www.stimson.org/?SN= SA20060207949. 36 National Air and Space Intelligence Center, 2009. 37 Peter Lavoy, ―Pakistan‘s Nuclear Posture: Security and Survivability,‖ Paper presented to the Conference on Pakistan‘s Nuclear Future, Nonproliferation Education Center, Washington, DC, April 28, 2006: http://www.npecweb.org/Frameset.asp?PageType=Single&PDFFile=20070121-Lavoy-PakistanNuclear Posture&PDFFolder=Essays. 38 Durrani, 2004. 39 For an in-depth discussion of minimum deterrence, see Naeem Salik, ―Minimum Deterrence and India Pakistan Nuclear Dialogue: Case Study on Pakistan,‖ Landau Network Centro Volta South Asia Security Project Case Study, January 2006. http://www.centrovolta.it/landau/South%20Asia%20Security%20Program_file %5CDocumenti%5CCase%20Studies%5CSalik%20- %20S.A.%20Case%20Study%202006.pdf. 40 It is worth noting, however, that President Zardari stated in late 2008 that Pakistan would not be the first to use nuclear weapons against India. See James Lamont and Farhan Bokhari, ―Pakistan In Trade And Arms Offer To India,‖ Financial Times, November 23, 2008; ―Pakistan Against Use Of Nuclear Weapons: Zardari,‖ Associated Press of Pakistan, November 22, 2008; ―Interview with President Asif Ali Zardari,‖ CNN Larry King Live, December 2, 2008. 41 Kanti Bajpai, ―No First Use in the India-Pakistan Context,‖ Pugwash Workshop No. 279, November 2002. http://www.pugwash.org/reports/nw/bajpai.htm. 42 Lavoy, 2006. 43 December 2007 Ordinance To Provide For The Constitution And Establishment Of National Command Authority. 44 Nuclear Black Markets: Pakistan, A.Q. Khan and the Rise of Proliferation Networks, (London: The International Institute for Strategic Studies), 2007. p. 111; Pakistan Announcement of Nuclear-Weapons Command-andControl Mechanism, Associated Press of Pakistan, February 3, 2000. Nuclear Black Markets, pp. 110-111, has organization charts of the NCA and SPD. 45 See P. Cotta-Ramusino and M. Martellini, ―Nuclear Safety, Nuclear Stability And Nuclear Strategy In Pakistan: A Concise Report Of A Visit By Landau Network - Centro Volta,‖ January 14, 2002. Available at http://www.pugwash.org/september11/pakistan-nuclear.htm; Kenneth N. Luongo and Brig. Gen. (Ret.) Naeem Salik, ―Building Confidence in Pakistan‘s Nuclear Security,‖ Arms Control Today, December 2007; Robin Walker, ―Pakistan‘s Evolution as a Nuclear Weapons State: Lt. Gen. Khalid Kidwai‘s CCC Address, Strategic Insights, November 1, 2006. 46 ―President Promulgated National Command Authority Ordinance,‖ Associated Press of Pakistan, December 13, 2007. 47 Proliferation: Threat and Response, p. 27. 48 Joby Warrick, ―Pakistan Nuclear Security Questioned; Lack of Knowledge About Arsenal May Limit U.S. Options,‖ Washington Post, November 11, 2007; Peter Wonacott, ―Inside Pakistan‘s Drive To Guard Its ABombs,‖ Wall Street Journal, November 29, 2007; David E. Sanger, ―Trust Us: So, What About Those Nukes?,‖ New York Times, November 11, 2007; Nuclear Black Markets, 2007, p.33; Cotta-Ramusino and Martellini, 2002. See also, George Perkovich of the Carnegie Endowment for International Peace quoted in Nigel Hawkes, ―Pakistan Could Lose Control of its Arsenal,‖ The Times (London), September 20, 2001. 49 Lavoy, ―Islamabad‘s Nuclear Posture: Its Premises and Implementation.‖ p. 141.

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Maurizio Martellini, ―Security and Safety Issues about the Nuclear Complex: Pakistan‘s Standpoints. A Concise Report Of A Visit To Islamabad By Landau Network Centro Volta (LNCV) Mission Carried Out On February 9-13 2008.‖ 51 Proliferation: Threat and Response, p. 28. 52 See Graham Allison, ―What About the Nukes?‖ Newsweek Web, December 28, 2007. http://www.newsweek.com/id/ 82259 53 Molly Moore and Kamran Khan, ―Pakistan Moves Nuclear Weapons - Musharraf Says Arsenal Is Now Secure,‖ Washington Post, November 11, 2001. 54 ―Partial transcript of Pakistan President Musharraf‘s televised speech asking the people of Pakistan to support his course of action,‖ September 19, 2001. http://www.washingtonpost.com/wp-srv/nation/specials/ attacked/transcripts/ pakistantext_09 1901 .html. 55 Bruce Riedel, ―American Diplomacy and the 1999 Kargil Summit at Blair House,‖ Center for the Advanced Study of India, Policy Paper Series, 2002. http://www.ccc.nps.navy.mil/research/kargil/reidel.pdf. 56 Lavoy, 2006. 57 ―Opinions Mixed on Pakistani Nuclear Security,‖ Global Security Newswire, November 6, 2007. http://www.nti.org/ d_newswire/issues/recent_stories.asp?category=nuclear#6783E660. 58 Also see comments by David Albright in the same interview (―Pakistan in Crisis: Interview with Benazir Bhutto,‖ CNN, November 5, 2007). 59 ―U.S.-Pakistan Strategic Relations,‖ Statement before the Committee on Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security June 12, 2008. 60 ―Lieutenant General Carter Ham Holds a Defense Department Briefing,‖ CQ Transcripts, November 7, 2007. 61 ―Al Baradei to Al Hayat,‖ Dar Al Hayat, English Edition on-line, January 10, 2008, http://english.daralhayat.com/Spec/01-2008/Article-20080110-639032eb-c0a8-10ed-01ae-81ab2ea588db/ story.html. 62 Also see comments by David Albright in ―Pakistan in Crisis,‖ 2007. 63 House Foreign Affairs Committee Hearing on Democracy, Authoritarianism and Terrorism in Contemporary Pakistan, November 7, 2007. 64 ―Pak Nukes Safely Guarded, Says Narayanan,‖ The Press Trust of India, December 16, 2007. 65 Lyubov Pronina and Ellen Pinchuk, ―Russia ‗Concerned‘ About Security of Pakistan‘s Nuclear Arsenal,‖ Bloomberg, March 25, 2009. 66 ―Pakistan Nukes Under Control: Musharraf,‖ Agence France Presse, November 13, 2007. 67 Krepon, June 12, 2008. 68 Michael Krepon, ―Complexities Of Nuclear Risk Reduction In South Asia,‖ The Hindu, May 29, 2009. 69 ―The Nomination of Dr. Condoleezza Rice to be Secretary of State,‖ Hearings before the Senate Foreign Relations Committee, January 18 and 19, 2005. The concept of a contingency plan to take over Pakistan‘s nuclear assets was first written about by Seymour Hersh, ―Watching the Warheads,‖ The New Yorker, November 5, 2001. 70 ―Strategic Assets Are Safe, Says FO,‖ Dawn, November 12, 2007. 71 ―Pentagon Readies Plan for Pakistan‘s Nuclear Arsenal,‖ The Guardian, December 28, 2007. For a discussion of the difficulties of such a scenario, see Shaun Gregory, ―The Security of Nuclear Weapons in Pakistan,‖ Pakistan Security Research Unit Brief Number 22, University of Bradford, November 18, 2007. Available at http://spaces.brad.ac.uk:8080/download/attachments/748/Brief_22finalised.pdf 72 Alex Wagner, ―U.S. Offers Nuclear Security Assistance to Pakistan,‖ Arms Control Today, December 2001. http://www.armscontrol.org/act/2001_12/paknucsecdec01.asp. 73 Joby Warrick, ―U.S. Has Concerns Over Security of Pakistan‘s Nuclear Weapons,‖ The Washington Post, November 11, 2007; David Sanger and William Broad, ―U.S. Secretly Aids Pakistan in Guarding Nuclear Arms,‖ The New York Times, November 17, 2007. 74 Kaushik Kapisthalam, ―Guarding Pakistan‘s Nuclear Estate,‖ Asia Times, April 6, 2005. http://www.atimes.com/ atimes/South_Asia/GD06Df04.html; Robert Windrem, ―Pakistan‘s Nuclear History Worries Insiders,‖ NBC News, November 6, 2007. http://www.msnbc.msn.com/id/21660667/. General Kidwai has stated that ―if a country can make complex nuclear weapons and ballistic cruise missiles grant it that PALs is a far simpler technology.‖ (Cited in Martellini, 2008). 75 Mubarakmand provided some details about Pakistan‘s use of such codes in the 2004 interview. 76 ―A Conversation With Former Deputy Secretary of State Richard Armitage,‖ PBS: The Charlie Rose Show, November 6, 2007. 77 Ben Arnoldy, ―Could Taliban Get Keys To Pakistan‘s A-Bomb? Experts See The Islamic Fighters As Less Of A Risk Than Radical Insiders Gaining Access To Nuclear Materials,‖ The Christian Science Monitor, May 15, 2009. 78 Bryan Bender, ―Pakistan, US In Talks On Nuclear Security,‖ The Boston Globe, May 5, 2009. 79 Abdul Mannan, ―Preventing Nuclear Terrorism in Pakistan: Sabotage of a Spent Fuel Cask or a Commercial Irradiation Source in Transport,‖ in Pakistan’s Nuclear Future, 2008; Martellini, 2008.

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Martellini, 2008. For more information on Pakistani proliferation, see CRS Report RL32745, Pakistan's Nuclear Proliferation Activities and the Recommendations of the 9/11 Commission: U.S. Policy Constraints and Options, by Richard P. Cronin, K. Alan Kronstadt, and Sharon Squassoni. Also see CRS Report RL3 3498, Pakistan-U.S. Relations, by K. Alan Kronstadt. 82 Libya obtained uranium enrichment technology and nuclear weapons designs that could support a nuclear weapons program. North Korea currently has a plutonium-based nuclear weapons program and may also have a uranium-based program. Iran is suspected of pursuing both plutonium- and uranium-based nuclear weapons programs. 83 Tenet, George and Harlow, Bill, At the Center of the Storm: My Years at the CIA, HarperCollins: New York, 2007. p. 261. 84 The report is available at http://www.wmd.gov/report/index.html. 85 Unclassified Statement for the Record Annual Threat Assessment, Senate Select Committee on Intelligence, January 11, 2007. 86 Nuclear Black Markets, 2007, p. 159. 87 Personal communication, November 9, 2007. 88 Details of Pakistan‘s nuclear-related legislation can be found in the country‘s reports to the UN 1540 Committee. Both can be found at http://daccessdds.un.org/doc/UNDOC/GEN/N04/597/46/PDF/N0459746.pdf? OpenElement. 89 Presentation given to Partnership for Global Security Workshop, ―Meeting the Nuclear Security Challenge in Pakistan,‖ February 2 1-22, 2008. http://www.partnershipforglobalsecurity.org/documents/zafar_export.pdf. 90 The Nuclear Suppliers Group is a multilateral, voluntary group of nuclear supplier states which have agreed to coordinate their exports of civilian nuclear technology and materials in order to prevent importers from using them to produce nuclear weapons. The Australia Group is a voluntary, informal, export-control arrangement through which participating countries coordinate their national export controls to limit the supply of chemicals and biological agents, as well as related equipment, technologies, and knowledge, to countries and nonstate entities suspected of pursuing chemical or biological weapons capabilities. The Missile Technology Control Regime is an informal, voluntary arrangement in which participants agree to adhere to common export policy guidelines applied to an ―annex‖ that lists items related to the proliferation of ballistic and cruise missiles, rockets, and unmanned air vehicles capable of delivering weapons of mass destruction. 91 The Chemical Weapons Convention Implementation Ordinance of 2000 regulates the import and export of chemicals in accordance with the convention. 92 Building Confidence in Pakistan‘s Nuclear Security: Workshop Synopsis. April 30, 2007. 93 Burns mentioned Pakistan‘s participation in the Container Security Initiative and the Secure Freight Initiative. Under these programs, ―the United States and Pakistan worked together to install screening and radiation detection equipment to scan U.S.-bound cargo.‖ He also stated that the Department of Energy ―is working with Pakistan on radiation source security and is in the process of finalizing an agreement to install radiation detection equipment at Pakistani ports and border crossings.‖ 94 GAO Report, Nonproliferation: U.S. Efforts to Combat Nuclear Networks Need Better Data on Proliferation Risks and Program Results, October 31, 2007. 95 Question #54, Pre-Hearing Questions for the Record by Senator Richard Lugar Senate Foreign Relations Committee, Nomination of Ellen M. Tauscher to be Under Secretary of State for Arms Control and International Security. http://lugar.senate.gov/sfrc/pdf/TauscherQFR.pdf. 96 ―Statement by Sen. Lugar on Nunn-Lugar and Pakistan,‖ May 6, 2009, http://lugar.senate.gov/record.cfm?id= 312588& 97 See Congressional Record S10429-S10431. 81

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In: Nuclear Ambitions and Issues in the Middle East Editor: Nathan E. Cohen

ISBN: 978-1-61668-353-5 © 2010 Nova Science Publishers, Inc.

Chapter 4

IRAN’S NUCLEAR PROGRAM: STATUS



Paul K. Kerr

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SUMMARY Although Iran claims that its nuclear program is exclusively for peaceful purposes, it has generated considerable concern that Tehran is pursuing a nuclear weapons program. Indeed, the UN Security Council has responded to Iran‘s refusal to suspend work on its uranium enrichment and heavy-water nuclear reactor programs by adopting several resolutions which imposed sanctions on Tehran. Despite this pressure, Iran continues to enrich uranium, install and operate additional centrifuges, and conduct research on new types of centrifuges. Tehran has also continued to produce centrifuge feedstock, as well as work on its heavy-water reactor and associated facilities. Whether Iran is pursuing a nuclear weapons program is, however, unknown. A National Intelligence Estimate made public in December 2007 assessed that Tehran ―halted its nuclear weapons program,‖ defined as ―Iran‘s nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichment-related work,‖ in 2003. The estimate, however, also assessed that Tehran is ―keeping open the option to develop nuclear weapons‖ and that any decision to end a nuclear weapons program is ―inherently reversible.‖ Intelligence community officials have reaffirmed this judgment on several occasions. Iranian efforts to produce fissile material for nuclear weapons by using its known nuclear facilities would almost certainly be detected by the IAEA. Although Iran has cooperated with the International Atomic Energy Agency (IAEA) to an extent, the agency says that Tehran has not gone far enough to alleviate all of the IAEA‘s concerns about Iran‘s enrichment and heavy-water reactor programs. The IAEA continues to investigate the program, particularly evidence that Tehran may have conducted procurement activities and research directly applicable to nuclear weapons development. 

This is an edited, reformatted and augmented version of a CRS Report for Congress publication dated October 2009.

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This report expands and replaces CRS Report RS2 1592, Iran’s Nuclear Program: Recent Developments, by Sharon Squassoni, and will be updated as necessary.

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BACKGROUND Iran‘s nuclear program began during the 1950s. Construction of a U.S.-supplied research reactor located in Tehran began in 1960; the reactor went critical in 1967.1 During the 1 970s, Tehran pursued an ambitious nuclear power program; according to contemporaneous U.S. documents, Iran wanted to construct 10-20 nuclear power reactors and produce more than 20,000 megawatts of nuclear power by 1994. Iran actually began constructing a light-water nuclear power reactor near the city of Bushehr. Tehran also considered obtaining uranium enrichment and reprocessing technology.2 Iran also took steps to demonstrate that it was not pursuing nuclear weapons. For example, Tehran signed the nuclear Nonproliferation Treaty (NPT) in 1968 and ratified it in 1970. Iran also submitted a draft resolution to the UN General Assembly in 1974 that called for establishing a nuclear-weapons-free zone in the Middle East. Nevertheless, the United States was even then concerned that Iran could pursue a nuclear weapons program, as evidenced by U.S. intelligence reports from the mid-1970s.3 Iran cancelled the nuclear program after the 1979 revolution, but ―reinstituted‖ the program in 1982, according to a 1988 CIA report.4 A 1985 National Intelligence Council report, which cited Iran as a potential ―proliferation threat,‖ stated that Tehran was ―interested in developing facilities that ... could eventually produce fissile material that could be used in a [nuclear] weapon.‖ The report, however, added that it ―would take at least a decade‖ for Iran to do so.5 The Iranian government says that it plans to expand its reliance on nuclear power in order to generate electricity. This program will, Tehran says, substitute for some of Iran‘s oil and gas consumption and allow the country to export additional fossil fuels.6 Currently, a Russian contractor is completing the Bushehr reactor and Iran says it intends to build additional reactors to generate 20,000 megawatts of power within the next 20 years.7 Iranian officials say that Tehran has begun design work on its first indigenously produced light-water reactor, which is to be constructed at Darkhovin.8 The head of Iran‘s Atomic Energy Organization, Ali Akbar Salehi, stated October 4, 2009, that the ―assembly of this plant will take ten years.‖9 According to an official associated with the project (plans for which predate the 1979 revolution), Iran anticipates that ―foreign experts‖ will be involved.10 Indeed, Salehi explained that other countries ―can cooperate in building this plant.‖11 Iranian officials have repeatedly asserted that the country‘s nuclear program is exclusively for peaceful purposes. For example, Supreme Leader Ayatollah Ali Khamene‘i declared during a June 3, 2008, speech that Iran is opposed to nuclear weapons ―based on religious and Islamic beliefs as well as based on logic and wisdom.‖ He added, ―Nuclear weapons have no benefit but high costs to manufacture and keep them. Nuclear weapons do not bring power to a nation because they are not applicable. Nuclear weapons cannot be used.‖ Similarly, Iranian Foreign Ministry spokesperson Hassan Qashqavi stated November 10, 2008, that ―pursuance of nuclear weapons has no place in the country‘s defense

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doctrine.‖12 President Mahmoud Ahmadinejad asserted during an April 9, 2009, speech that ―those who accumulate nuclear weapons are backwards in political terms.‖13 However, the United States and other governments have argued that Iran may be pursuing, at a minimum, the capability to produce nuclear weapons. Discerning a peaceful nuclear program from a nuclear weapons program can be difficult because of much of the technology‘s dual-use nature. In addition, military nuclear programs may coexist with civilian programs, even without an explicit decision to produce nuclear weapons. Jose Goldemberg, Brazil‘s former secretary of state for science and technology, observed that a country developing the capability to produce nuclear fuel

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does not have to make an explicit early [political] decision to acquire nuclear weapons. In some countries, such a path is supported equally by those who genuinely want to explore an energy alternative and by government officials who either want nuclear weapons or just want to keep the option open.14

Some analysts argue that several past nuclear programs, such as those of France, Sweden, and Switzerland, illustrate this approach.15 The main source of proliferation concern is Tehran‘s construction of a gas-centrifugebased uranium-enrichment facility. Iran claims that it wants to produce low-enriched uranium (LEU) fuel for its planned light-water nuclear reactors. Although Iranian officials have expressed interest in purchasing nuclear fuel from other countries, they assert that Tehran should have an indigenous enrichment capability as a hedge against possible fuel supply disruptions.16 Gas centrifuges enrich uranium by spinning uranium hexafluoride gas at high speeds to increase the concentration of the uranium-235 isotope. Such centrifuges can produce both LEU, which can be used in nuclear power reactors, and highly enriched uranium (HEU), which is one of the two types of fissile material used in nuclear weapons. HEU can also be used as fuel in certain types of nuclear reactors.17 Iran also has a uranium-conversion facility, which converts uranium oxide into several compounds, including uranium hexafluoride.18 A heavy-water reactor, which Iran is constructing at Arak, has also been a source of concern. Although Tehran says that the reactor is intended for the production of medical isotopes, it is a proliferation concern because its spent fuel will contain plutonium well suited for use in nuclear weapons. Spent nuclear fuel from nuclear reactors contains plutonium, the other type of fissile material used in nuclear weapons. In order to be used in nuclear weapons, however, plutonium must be separated from the spent fuel—a procedure called ―reprocessing.‖ Iran has said that it will not engage in reprocessing. In addition to the dual-use nature of the nuclear programs described above, Tehran‘s interactions with the International Atomic Energy Agency (IAEA) have contributed to suspicions that Tehran has a nuclear weapons program.19 In the past, Iran has taken actions that interfered with the agency‘s investigation of its nuclear program, including concealing nuclear activities and providing misleading statements. Although the IAEA has gotten a more complete picture of Iran‘s nuclear program since its investigation began in 2002, the agency still wants Tehran to provide more information. IAEA Director-General Mohamed ElBaradei explained in a June 2008 interview that

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Paul K. Kerr they [the Iranians] have concealed things from us in the past, but that doesn‘t prove that they are building a bomb today. They continue to insist that they are interested solely in using nuclear power for civilian purposes. We have yet to find a smoking gun that would prove them wrong. But there are suspicious circumstances and unsettling questions. The Iranians‘ willingness to cooperate leaves a lot to be desired. Iran must do more to provide us with access to certain individuals and documents. It must make a stronger contribution to clarifying the last unanswered set of questions—those relating to a possible military dimension of the Iranian nuclear program.20

The IAEA reiterated September 17, 2009, that it ―has no concrete proof that Iran has or has ever had a nuclear weapons programme.‖

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RECENT NUCLEAR CONTROVERSY The recent public controversy over Iran‘s nuclear program began in August 2002, when the National Council of Resistance on Iran (NCRI), an Iranian exile group, revealed information during a press conference (some of which later proved to be accurate) that Iran had built nuclear- related facilities at Natanz and Arak that it had not revealed to the IAEA. The United States had been aware of at least some of these activities, according to knowledgeable former officials.21 States-parties to the nuclear Nonproliferation Treaty (NPT) are obligated to conclude a safeguards agreement with the IAEA. In the case of non-nuclear-weapon states-parties to the treaty (of which Iran is one), such agreements allow the agency to monitor nuclear facilities and materials to ensure that they are not diverted for military purposes. However, the agency‘s inspections and monitoring authority is limited to facilities that have been declared by the states-parties.22 Additional protocols to IAEA safeguards agreements augment the agency‘s ability to investigate clandestine nuclear facilities and activities by increasing the agency‘s authority to inspect certain facilities and demand additional information from statesparties.23 The IAEA‘s statute requires the agency‘s Board of Governors to refer cases of noncompliance with safeguards agreements to the UN Security Council. Prior to the NCRI‘s revelations, the IAEA had expressed concerns that Iran had not been providing the agency with all relevant information about its nuclear programs, but had never found Iran in violation of its safeguards agreement. In fall 2002, the IAEA began to investigate Iran‘s nuclear activities at Natanz and Arak, and inspectors visited the sites the following February. The IAEA board adopted its first resolution, which called on Tehran to increase its cooperation with the agency‘s investigation and to suspend its uranium enrichment activities, in September 2003. The next month, Iran concluded an agreement with France, Germany, and the United Kingdom, collectively known as the ―E3,‖ to suspend its enrichment activities, sign and implement an additional protocol to its 1974 IAEA safeguards agreement, and comply fully with the IAEA‘s investigation.24 As a result, the IAEA board decided to refrain from referring the matter to the UN Security Council. Ultimately, the IAEA‘s investigation, as well as information Tehran provided after the October 2003 agreement, revealed that Iran had engaged in a variety of clandestine nuclearrelated activities, some of which violated Iran‘s safeguards agreement. These included

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plutonium separation experiments, uranium enrichment and conversion experiments, and importing various uranium compounds. After October 2003, Iran continued some of its enrichment-related activities, but Tehran and the E3 agreed in November 2004 to a more detailed suspension agreement. However, Iran resumed uranium conversion in August 2005 under the leadership of President Mahmoud Ahmadinejad, who had been elected two months earlier. Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. In response, the IAEA board adopted a resolution February 4, 2006, that referred the matter to the Security Council. Two days later, Tehran announced that it would stop implementing its additional protocol. In June 2006, China, France, Germany, Russia, the United Kingdom, and the United States, collectively known as the ―P5+1,‖ presented a proposal to Iran that offered a variety of incentives in return for Tehran taking several steps to assuage international concerns about its enrichment and heavy-water programs.25 The proposal called on the government to address the IAEA‘s ―outstanding concerns ... through full cooperation‖ with the agency‘s ongoing investigation of Tehran‘s nuclear programs, ―suspend all enrichment-related and reprocessing activities,‖ and resume implementing its additional protocol. European Union High Representative for Common Foreign and Security Policy Javier Solana presented a revised version of the 2006 offer to Iran in June 2008.26 Representatives from the P5+1 discussed the new proposal with Iranian officials in July 2008. Iran provided a follow-up response the next month, but the six countries deemed it unsatisfactory.27 Tehran has told the IAEA that it would implement its additional protocol ―if the nuclear file is returned from the Security Council‖ to the agency.28 It is, however, unclear how the council could meet this condition. Iran‘s Minister for Foreign Affairs Manouchehr Mottaki told reporters October 7, 2009, that Iran is not discussing ratification of the Protocol.29 The 2006 offer‘s requirements have also been included in several UN Security Council resolutions, the most recent of which, Resolution 1835, was adopted September 27, 2008.30 However, an August 2009 report from ElBaradei to the Security Council and the IAEA board indicated that Tehran has continued to defy the council‘s demands by continuing work on both its uranium enrichment program and heavy-water reactor program.31 Iranian officials maintain that Iran will not suspend its enrichment program. Iran issued another proposal in early September 2009, which described a number of economic and security issues as potential topics for discussion, but only obliquely mentioned nuclear issues and did not explicitly mention Iran‘s nuclear program.32

October 2009 Geneva Meeting33 After an October 1 meeting in Geneva with the P5+1 and Solana, Iranian officials repeatedly stated that Tehran would like future discussions about its September proposal. Nevertheless, during that meeting, Iranian officials agreed in principle to a proposal that would provide fuel enriched to 19.75% uranium-235 for Iran‘s U.S.-supplied Tehran Research Reactor, which produces medical isotopes and operates under IAEA safeguards. Iran asked the agency in June to provide a new supply of fuel for the reactor, which will run

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out of fuel in approximately 18 months. Subsequently, the United States and Russia presented a proposal to the IAEA (which the agency conveyed to Iran) for providing fuel for the reactor. According to the proposal, Iran would transfer approximately 1,200 kilograms of its lowenriched uranium hexafluoride to Russia, which would either enrich the uranium to 19.75% uranium-235 or produce the LEU from Russian-origin uranium. Russia would then transfer the low-enriched uranium hexafluoride to France for fabrication into fuel assemblies. Finally, France would transfer the assemblies to Russia for shipment to Iran. Iran had, as of July 31, 2009, produced 1,508 kilograms of low-enriched uranium hexafluoride containing less than 5% uranium-235. Beginning October 19, Iranian officials met with officials from the IAEA, France, Russia, and the United States to discuss details of implementing the proposal, such as the fuel price, contract elements, and a timetable for shipping the fuel. ElBaradei announced October 21 that the parties had reached a ―draft agreement.‖ The P5+1 plan to hold another meeting ―before the end of October,‖ a French foreign Ministry spokesperson said October 13.

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Iran’s Cooperation with the IAEA Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran‘s nuclear program.34 Most of these issues,35 which had contributed to suspicions that Iran had been pursuing a nuclear weapons program, have essentially been resolved, but ElBaradei told the IAEA board June 2, 2008, that there is ―one remaining major [unresolved] issue,‖ which concerns questions regarding ―possible military dimensions to Iran‘s nuclear programme.‖ Iran maintains that it has not conducted any work on nuclear weapons. Iran and the IAEA have had a series of discussions regarding these issues; based on recent reports from ElBaradei, the last meeting was held August 18-20, 2008. The agency has provided Iran with documents or (in some cases) descriptions of documents, which themselves were provided to the IAEA by several governments, indicating that Iranian entities may have conducted studies related to nuclear weapons development. The subjects of these studies included missile reentry vehicles for delivering nuclear warheads, uranium conversion, and conventional explosives used in nuclear weapons.36 Iranian officials have claimed that the documents are not authentic,37 but ElBaradei told the IAEA Board of Governors June 17, 2009, that, nevertheless, ―there is enough in these alleged studies to create concern in the minds of our professional inspectors.‖ ElBaradei reported in May 2008 that Iranian officials have acknowledged the accuracy of some of the information in the documents, but the activities described were, the Iranians said, exclusively for non-nuclear purposes. Tehran has provided some relevant information about these matters to the IAEA, but ElBaradei reported in August that the government still should ―provide more substantive responses‖ to the IAEA, as well as ―the opportunity to have detailed discussions with a view to moving forward on these issues, including granting the Agency access to persons, information and locations identified in the documents.‖ The IAEA has asked Tehran about other information suggesting that the country may have pursued nuclear weapons, such as

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79

―information about a high level meeting in 1984 on reviving Iran‘s pre-revolution nuclear programme‖; ―the scope of a visit by officials‖ associated with Iran‘s Atomic Energy Organization ―to a nuclear installation in Pakistan in 1987‖; information on 1993 meetings between Iranian officials and members of a clandestine procurement network run by former Pakistani nuclear official Abdul Qadeer Khan; and information about work done in 2000 which apparently related to reprocessing.38

The agency also wants Iran to provide more information on nuclear-related procurement, production, and research activity by entities linked to Iran‘s military and defense establishments. These included attempts to obtain items, such as spark gaps, shock wave software, and neutron sources, which could be useful for developing nuclear weapons.39 In addition, ElBaradei‘s May 2008 report notes that ―substantial parts‖ of Iran‘s centrifuge components ―were manufactured in the workshops of the Defence Industries Organization.‖ Furthermore, the IAEA has asked Tehran to provide additional information about the manner in which it acquired a document ―describing the procedures‖ for reducing uranium hexafluoride to uranium metal, as well as ―machining ... enriched uranium metal into hemispheres,‖ which are ―components of nuclear weapons.‖40 Tehran has previously told the agency that it was offered equipment for casting uranium but never actually received it. According to Iran, its nuclear suppliers, many of whom were affiliated with the Khan network, provided the document in 1987 at their own initiative, rather than at Tehran‘s request. Islamabad has confirmed to the IAEA that ―an identical document exists‖ in Pakistan.41 ElBaradei‘s November 2008 report points out that the IAEA, with the exception of the document related to uranium metal, has ―no information ... on the actual design or manufacture by Iran‖ of components (nuclear or otherwise) for nuclear weapons. That report, as well as subsequent reports from ElBaradei, also suggests that Iran and the IAEA are at an impasse; Tehran has not cooperated with the agency on these matters since ElBaradei‘s September 2008 report. Iranian officials have indicated that Tehran will not provide any further information to the agency.42 Nevertheless, Iran has been cooperating with the agency in other respects, albeit with varying consistency. The IAEA has been able to verify that Iran‘s declared nuclear facilities and materials have not been diverted for military purposes. And Tehran has provided the agency with ―information similar to that which Iran had previously provided pursuant to the Additional Protocol,‖ ElBaradei reported in February 2008, adding that this information clarified the agency‘s ―knowledge about Iran‘s current declared nuclear programme.‖ Iran, however, provided this information ―on an ad hoc basis and not in a consistent and complete manner,‖ the report said.43 Indeed, the IAEA requested in April 2008 that Iran provide ―as a transparency measure, access to additional locations related ... to the manufacturing of centrifuges, R&D on uranium enrichment, and uranium mining.‖ But Tehran has not yet agreed to do so. ElBaradei‘s February 2008 report underscored the importance of full Iranian cooperation with the agency‘s investigation, as well as Tehran‘s implementation of its additional protocol: Confidence in the exclusively peaceful nature of Iran‘s nuclear programme requires that the Agency be able to provide assurances not only regarding declared nuclear material, but,

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equally importantly, regarding the absence of undeclared nuclear material and activities in Iran ... Although Iran has provided some additional detailed information about its current activities on an ad hoc basis, the Agency will not be in a position to make progress towards providing credible assurances about the absence of undeclared nuclear material and activities in Iran before reaching some clarity about the nature of the alleged studies, and without implementation of the Additional Protocol.

The IAEA has also asked Iran to ―reconsider‖ its March 2007 decision to stop complying with a portion of the subsidiary arrangements for its IAEA safeguards agreement. That provision, to which Iran agreed in 2003, requires Tehran to provide design information for new nuclear facilities ―as soon as the decision to construct, or to authorize construction, of such a facility has been taken, whichever is earlier.‖ Previously, Iran was required to provide design information for a new facility only 180 days before introducing nuclear material into it. If Tehran does not alter this decision, the agency will receive considerably later notice about the construction of future Iranian nuclear facilities. Indeed, invoking its March 2007 decision, Iran has refused to provide the IAEA with ―preliminary design information‖ for the planned Darkhovin reactor. The IAEA first requested the information in December 2007. Iran had also refused to allow IAEA officials to conduct an inspection of the Arak reactor in order to verify design information that Tehran provided to the agency. ElBaradei argued in his June 2009 report that this continued refusal ―could adversely impact the Agency‘s ability to carry out effective safeguards at that facility,‖ adding that satellite imagery is insufficient because Iran has completed the ―containment structure over the reactor building, and the roofing for the other buildings on the site.‖ However, IAEA inspectors visited the reactor facility in August 2009 to verify design information, according to ElBaradei‘s report issued the same month. IAEA inspectors had last visited the reactor in August 2008. In addition, Iran failed to notify the IAEA until September 2009 that it was constructing a uranium enrichment facility near the city of Qom, although the decision to begin construction on that facility had apparently been made prior to Iran‘s March 2007 decision (see the ―Qom Facility‖ section below). In a letter published October 1, the IAEA asked Iran to provide additional information about the facility, including ―further information with respect to the name and location of the pilot enrichment facility, the current status of its construction and plans for the introduction of nuclear material into the facility.‖ The letter also requested that Iran provide IAEA inspectors with access to the facility ―as soon as possible.‖ ElBaradei announced during an October 4 press conference that IAEA officials would inspect the Qom facility October 25, explaining that the agency needs to understand its ―relationship to Iran‘s nuclear program, its capacity and many other, technical questions.‖

STATUS OF IRAN’S NUCLEAR PROGRAMS Some non-governmental experts and former U.S. officials have argued that, rather than producing fissile material indigenously, Iran could obtain such material from foreign sources.44 A National Intelligence Estimate (NIE) made public December 3, 2007, states that the intelligence community ―cannot rule out that Iran has acquired from abroad—or will acquire in the future—a nuclear weapon or enough fissile material for a weapon.‖45 Similarly, during a press briefing that same day, a senior intelligence official characterized such

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acquisition as ―an inherent option‖ for Iran. However, Tehran‘s potential ability to produce its own HEU or plutonium is a greater cause of concern; the official explained that ―getting bits and pieces of fissile material from overseas is not going to be sufficient‖ to produce a nuclear arsenal.

Fuel Manufacturing Plant Iran is continuing work on a fuel manufacturing plant that, when complete, is to produce fuel for the Arak and Darkhovin reactors.46 The plant has produced fuel rods and appears to be nearly complete.47

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Uranium Enrichment Iran has a pilot centrifuge facility and a larger commercial facility, both located at Natanz. The latter is eventually to hold more than 47,000 centrifuges.48 Former Vice President Gholamreza Aghazadeh, who also headed Iran‘s Atomic Energy Organization until this past July, explained in February 2009 that Iran‘s goal is to install all of them by 2015.49 Iran began enriching uranium in the facility after mid-April 2007; as of May 31, 2009, Tehran had produced an estimated total of 1,508 kilograms of low-enriched uranium hexafluoride containing less than 5% uranium-235.50 This quantity of LEU, if further enriched, could theoretically produce enough HEU for a nuclear weapon.51 However, an Iranian attempt to enrich this LEU would likely be detected by the IAEA. (This point is discussed in greater detail below.) Individual centrifuges are linked together in cascades; each cascade in the commercial facility contains 164 centrifuges. According to ElBaradei‘s August 2009 report, Iran is feeding uranium hexafluoride into 28 cascades (4,592 centrifuges) of first generation (IR-1) centrifuges and is operating at least another 8 cascades (1,312 centrifuges) without feedstock. Tehran is also installing and testing additional IR- 1 centrifuges in the facility,52 as well as testing two other types of more-advanced centrifuges in a pilot facility, which could increase the commercial facility‘s enrichment capacity.53 However, the research on new centrifuges has apparently been less successful than Tehran‘s development of its IR-1 centrifuge.54 Aghazadeh indicated this past February that at least one new type of centrifuge would be installed in the ―near future.‖55 The current head of Iran‘s Atomic Energy Organization, Ali Akbar Salehi, suggested in a September 22 press conference that Iran would slow down its installation of centrifuges at Natanz and ―focus on research and development dimension in order to improve the quality of our productions.‖56 In addition to its centrifuge work, Tehran is continuing to produce uranium hexafluoride; as of August 10, 2009, Iran had produced approximately 541 metric tons since March 2004.57 Prior to 2009, Tehran apparently improved its ability to produce centrifuge feedstock of sufficient purity for light-water reactor fuel;58 whether Iran is currently able to produce feedstock pure enough for weapons-grade HEU is unclear. A senior U.S. intelligence official said December 3, 2007, that a country needs to be able to ―operate large numbers of centrifuges for long periods of time with very small failure

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rates‖ in order to be able to ―make industrial quantities of enriched uranium.‖ The NIE stated that Iran still ―faces significant technical problems operating‖ its centrifuges. Since then, however, Iran‘s ability to operate its centrifuges appears to have improved, although, as of June 2009, its IR-1 centrifuges continued to run below design capacity.59 A report to Congress submitted by the Deputy Director for National Intelligence described the amount of LEU that Iran produced in 2008 as a ―significant improvement‖ over the amount it had produced in 2007.60 Indeed, data from IAEA reports demonstrate that the Natanz facility‘s rate of LEU production increased significantly between January and May 2008. Other reports have reached similar conclusions. For example, a September 15, 2008, report from the Institute for Science and International Security (ISIS) says that Tehran‘s centrifuges ―appear to be running at approximately 85 percent of their stated target capacity, a significant increase over previous rates.‖61 A senior UN official reportedly offered a similar assessment that same month.62 Moreover, a June 2009 ISIS report points out that, based on data from ElBaradei‘s June report, Iran has improved its daily rate of LEU production by 20%.63 That rate has since remained the same, according to data from ElBaradei‘s August report.64 The extent to which Iran‘s progress is sustainable is open to question. Former Pakistani nuclear official Abdul Qadeer Khan described Pakistan‘s first-generation centrifuges as ―unsuccessful‖ in a 1998 interview.65 Furthermore, Mark Fitzpatrick of the International Institute of Strategic Studies observed that ―[i]t can be years before it is clear whether and enrichment programme is working well,‖ noting that centrifuges at a Japanese enrichment facility ―started to crash seven years after installation.‖66 It is also worth noting that Iran‘s ability to produce additional feedstock for centrifuges may be hindered by its dwindling supply of uranium oxide; Tehran is apparently running out of foreign- supplied uranium oxide and, although Iran is producing more of the material from indigenously mined uranium,67 it had not yet transferred any indigenously produced uranium oxide to its uranium conversion facility as of June 2009.68 Whether this is still the case is unclear; ElBaradei‘s August report states that Iran has shipped samples of ammonium diuranate containing about two kilograms of uranium to the conversation facility, suggesting that Iran has not yet shipped larger quantities of uranium oxide to the facility. A senior intelligence official explained during the December press briefing that the ―acquisition of fissile material ... remains the governing element in any timelines in which they‘d have a nuclear device.‖ Stating that ―centrifuge enrichment is how Iran probably could first produce enough fissile material for a weapon,‖ the 2007 NIE adds that ―the earliest possible date Iran would be technically capable of producing enough HEU for a weapon is late 2009.‖69 This date, however, ―is very unlikely,‖ the estimate says, adding that ―Iran probably would be technically capable of producing enough HEU for a weapon sometime during the 2010-2015 time frame.‖ But the State Department Bureau for Intelligence and Research, the estimate says, judges that Tehran ―is unlikely to achieve this capability before 2013‖70 and all intelligence agencies ―recognize the possibility that this capability may not be attained until after 2015.‖71 Some independent experts have published estimates for the amount of time necessary for the Natanz facility to produce enough HEU for a weapon—a process that would require Iran to reconfigure the cascades, which are not currently configured to produce HEU, and further enrich the uranium.72 As noted, the above time frame assesses Tehran‘s capability to produce HEU from its Natanz facility. However, the 2007 NIE states that Iran would ―probably would use covert facilities— rather than its declared nuclear sites—for the production of highly enriched

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uranium for a weapon.‖ Indeed, it is very difficult to divert without detection significant amounts of nuclear material from centrifuge facilities under IAEA safeguards. A 2004 CIA report concluded that ―inspections and safeguards will most likely prevent Tehran from using facilities declared to the IAEA directly for its weapons program as long as Iran remains a party to the NPT.‖73 Moreover, it would be extremely difficult to reconfigure the cascades in the Natanz facility without detection.74 Although Tehran could end its cooperation with the IAEA and use its declared centrifuge facilities to develop fissile material, such an action would be virtually unprecedented.75 A senior intelligence official explained that Iran could use knowledge gained from its Natanz facilities at covert enrichment facilities. According to the NIE, a ―growing amount of intelligence indicates Iran was engaged in covert uranium conversion and uranium enrichment activity,‖ but Tehran probably stopped those efforts in 2003.

Qom Facility76 Despite the intelligence assessment described in the previous paragraph, Iran revealed that it was constructing a new gas-centrifuge-based enrichment facility in September 2009. Tehran provided some details about the facility to the IAEA in a September 21, 2009, letter. Four days after the IAEA received the letter, officials from the United States, Britain, and France revealed that they had previously developed intelligence on the facility. The three governments provided a detailed intelligence briefing to the IAEA after the agency received Iran‘s letter. U.S. officials have said that, despite its letter to the agency, Iran intended for the facility to be kept secret. Tehran is to supply additional information to the IAEA. Salehi said in a September 29 television interview that Iran would soon provide the IAEA with a ―timetable for inspection‖ of the facility.77 The United States has been ―observing and analyzing the facility for several years,‖ according to September 25, 2009, Obama administration talking points, which added that ―there was an accumulation of evidence‖ earlier in 2009 that the facility was intended for enriching uranium. Some of this evidence apparently indicated that ―Iran was installing the infrastructure required for centrifuges earlier this year.‖ U.S. officials have not said exactly when Iran began work on the facility, which is ―located in an underground tunnel complex on the grounds of an Islamic Revolutionary Guard Corps‖ base near the Iranian city of Qom.78 But Majlis speaker Ali Larijani, who was formerly Iran‘s lead nuclear negotiator, indicated September 27 that Iran had been constructing the facility for approximately three years.79 The facility, according to the United States, is designed to hold approximately 3,000 centrifuges, but the United States does not know which type Iran plans to install. Iranian officials have stated that no centrifuges have yet been installed,80 that Tehran will announce which type of centrifuges are to be installed,81 and that no nuclear material has been introduced into the facility. Moreover, Mottaki indicated during an October 1 interview with National Public Radio that Tehran intends to install more than 3,000 centrifuges in the facility. Iran is also constructing support buildings at the facility. According to the United States, Tehran will not be able to begin enriching uranium in the facility before 2010. Iranian officials have given a slightly longer timeframe of between one and two years.82 President Obama stated September 25 that ―the size and configuration of this facility is inconsistent with a peaceful program.‖ But the administration‘s talking points were somewhat more vague, stating that the facility ―is too small to be viable for production of fuel for a nuclear power reactor,‖ although it ―could be used‖ for centrifuge research and development

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or ―configured to produce weapons-grade uranium.‖ The facility ―would be capable of producing approximately one weapons worth‖ of HEU per year, depending on the type and performance of the installed centrifuges. Iranian officials have said that the facility is for peaceful purposes and that Tehran has acted in accordance with its international obligations. The letter to the IAEA described the facility as a ―new pilot fuel enrichment plant‖ that would produce uranium enriched to no higher than five% uranium-235. As for the facility‘s secret nature, Iranian officials have argued that Tehran was not previously obligated to disclose it to the IAEA.83 Furthermore, Iranian officials have stated on several occasions that the facility was concealed in order to protect it from military attacks.84 Iranian officials have denied that they have other undisclosed enrichment-related facilities85 and no British, French, or U.S. officials have disclosed evidence of such Iranian facilities. However, UK Foreign Secretary David Miliband suggested in a September 28 television interview that Iran is engaged in other secret nuclear activities.86

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Plutonium Iran acknowledged to the IAEA in 2003 that it had conducted plutonium-separation experiments—an admission which aroused suspicions that Iran could have a program to produce plutonium for nuclear weapons. The IAEA, however, continued to investigate the matter, and ElBaradei reported in August 2007 that the agency has resolved its questions about Iran‘s plutonium activities.87 The 2007 NIE stated that ―Iran will not be technically capable of producing and reprocessing enough plutonium for a weapon before about 2015.‖ But, as noted above, Iran says that it does not plan to engage in reprocessing, and numerous reports from ElBaradei have noted that the IAEA has found no evidence that Iran is engaging in any such activities.

Arak Reactor Iran says that its heavy-water reactor, which is being constructed at Arak, is intended for the production of medical isotopes. According to a May 5, 2008, presentation by Ambassador Ali Asghar Soltanieh, Iran‘s Permanent Representative to the International Atomic Energy Agency, the reactor is to substitute for an ―outdated‖ LEU-fueled research reactor in Tehran that has been in operation since 1967.88 89 However, the reactor is a proliferation concern because its spent fuel will contain plutonium better suited for nuclear weapons than the plutonium produced by light- water moderated reactors, such as the Bushehr reactor. In addition, Iran will be able to operate the reactor with natural uranium, which means that it will not be dependent on supplies of enriched uranium. Salehi stated September 26, 2009, that the reactor would be ―operational‖ within the next three or four years.‖90 Iran also has a plant for producing heavy water. According to ElBaradei‘s June 2009 report, satellite imagery indicates that the plant has been ―operating intermittently‖ since February 2009. ElBaradei‘s report from that month stated that the plant was ―in operational condition,‖ but his August report stated that the plan ―seems not to have been operating since the last report.‖

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Bushehr Reactor Iran is also constructing near the city of Bushehr a 1,000-megawatt nuclear power reactor moderated by light water. The original German contractor, which began constructing the reactor in 1975, abandoned the project following Iran‘s 1979 revolution. Russia agreed in 1995 to complete the reactor, but the project has since encountered repeated delays. In February 2005, Moscow and Tehran concluded an agreement stating that Russia would supply fuel for the reactor for 10 years. At the time, the director of the Russian Federal Agency for Atomic Energy said the reactor would begin operating in late 2006. Loading fuel into the reactor is scheduled to take place during October and November 2009, according to the IAEA. Iranian and Russian officials have said that the reactor would begin by the end of 2009,91 but Salehi stated September 15 that ―[w]e hope that Bushehr will be commissioned at the earliest. We will, however, specify no dates.‖92 Russia has blamed financial and technical issues for delaying the project‘s completion. However, it had been widely believed that Moscow may have been delaying fuel shipments in order to increase political pressure on Iran to comply with the Security Council resolutions. In any case, Atomstroyexport sent the first shipment of LEU fuel to Iran on December 16, 2007, and the reactor received the last shipment near the end of January. The fuel, which is under IAEA seal, will contain no more than 3.62% uranium-235, according to an Atomstroyexport spokesperson.93 The United States had previously urged Moscow to end work on the project, citing concerns that it could aid an Iranian nuclear weapons program by providing the country with access to nuclear technology and expertise.94 However, U.S. officials said in 2002 that Washington would drop these public objections if Russia took steps to mitigate the project‘s proliferation risks; the 2005 deal requires Iran to return the spent nuclear fuel to Russia.95 This measure is designed to ensure that Tehran will not separate plutonium from the spent fuel. Moscow also argues that the reactor will not pose a proliferation risk because it will operate under IAEA safeguards. It is worth noting that light-water reactors are generally regarded as more proliferation-resistant than other types of reactors. Although the UN Security Council resolutions restrict the supply of nuclear-related goods to Iran, they do permit the export of nuclear equipment and fuel related to light-water reactors.

DOES IRAN HAVE A NUCLEAR WEAPONS PROGRAM? In addition to the possible nuclear weapons-related activities discussed above, Iran has continued to develop ballistic missiles, which could potentially be used to deliver nuclear weapons. It is worth noting, however, that Director of National Intelligence Dennis Blair indicated during a March 10, 2009, Senate Armed Services Committee hearing that Iran‘s missile developments do not necessarily indicate that the government is also pursuing nuclear weapons, explaining that ―I don't think those missile developments ... prejudice the nuclear weapons decision one way or another. I believe those are separate decisions.‖ Iran is developing missiles and space launch vehicles ―for multiple purposes,‖ he added. In any case, Tehran‘s nuclear program has also raised concerns for various other reasons. First, Iran has been secretive about the program. For example, Tehran hindered the IAEA

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investigation by failing to disclose numerous nuclear activities, destroying evidence, and making false statements to the agency.96 Moreover, although Iran‘s cooperation with the agency has improved, the IAEA has repeatedly criticized Tehran for failing to provide the agency with timely access to documents and personnel. Second, many observers have questioned Iran‘s need for nuclear power, given the country‘s extensive oil and gas reserves. The fact that Tehran resumed its nuclear program during the Iran- Iraq war has also cast doubt on the energy rationale. Furthermore, many countries with nuclear power reactors purchase nuclear fuel from foreign suppliers—a fact that calls into question Iran‘s need for an indigenous enrichment capability, especially since Russia has agreed to provide fuel for the Bushehr reactor. Moreover, although Tehran plans to develop a large nuclear power program, the country lacks sufficient uranium deposits—a fact acknowledged by Iranian officials.97 However, Iran maintains that its enrichment program has always been exclusively for peaceful purposes. Tehran argues that it cannot depend on foreign suppliers for reactor fuel because such suppliers have been unreliable in the past.98 Iran also says that it has been forced to conceal its nuclear procurement efforts in order to counter Western efforts to deny it nuclear technology—a claim that appears to be supported by a 1997 CIA report.99 Aghazadeh has also argued that, although Iran does not need to produce fuel for the Bushehr reactor, the Natanz facility needs to be completed if it is to be able provide fuel for the planned Darkhovin reactor.100 Although few experts argue that there is no evidence that Iran has pursued a nuclear weapons program, some have documented Tehran‘s projected difficulty in exporting oil and natural gas without additional foreign investment in its energy infrastructure.101 And at least one expert has described Iran‘s inability to obtain nuclear fuel from an international enrichment consortium called Eurodif. During the 1970s, Iran had reached an agreement with Eurodif that entitled Iran to enriched uranium from the consortium in exchange for a loan.102 Iran‘s stated rationale for its Arak reactor has also been met with some skepticism. Tehran says it needs the reactor to produce medical isotopes and to replace the Tehran research reactor. However, that reactor is capable of producing such isotopes and has unused capacity. In addition, non-proliferation experts have argued that the new reactor would be unnecessary for producing such isotopes.103

The 2007 National Intelligence Estimate According to the 2007 NIE, ―Iranian military entities were working under government direction to develop nuclear weapons‖ until fall 2003, after which Iran halted its nuclear weapons program ―primarily in response to international pressure.‖ The NIE defines ―nuclear weapons program‖ as ―Iran‘s nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichment-related work.‖ It adds that the intelligence community also assesses ―with moderate-to-high confidence that Tehran at a minimum is keeping open the option to develop nuclear weapons.‖104 The NIE also states that, because of ―intelligence gaps,‖ the Department of Energy and the National Intelligence Council ―assess with only moderate confidence that the halt to those activities represents a halt to Iran‘s entire nuclear weapons program.‖

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The NIE also states that ―Tehran‘s decision to halt its nuclear weapons program suggests it is less determined to develop nuclear weapons than we have been judging since 2005.‖105 The change in assessments, a senior intelligence official said December 3, 2007, was the result of ―new information which caused us to challenge our assessments in their own right, and illuminated previous information for us to be able to see it perhaps differently than we saw before, or to make sense of other data points that didn‘t seem to self-connect previously.‖ According to press accounts, this information included various written and oral communications among Iranian officials which indicated that the program had been halted.106 The United States may also have obtained information from Iranian officials who defected as part of a CIA program to induce them to do so,107 as well as from penetration of Iran‘s computer networks.108 Additionally, the NIE also incorporated open-source information, such as photographs of the Natanz facility that became available after Iran allowed a tour by members of the press. According to the 2007 NIE, the intelligence community assesses ―with moderate-to-high confidence that Iran does not have a nuclear weapon.‖ The community assesses ―with low confidence that Iran probably has imported at least some weapons-usable fissile material,‖ but still judges ―with moderate-to-high confidence‖ that Tehran still lacks sufficient fissile material for a nuclear weapon. On several occasions, the U.S. intelligence community has reaffirmed the 2007 NIE‘s assessment that Iran halted its nuclear weapons program but is keeping its options open.109 For example, Leon Panetta, Director of the Central Intelligence Agency, did so in May 2009.110 More recent press accounts have also reported that the community does not believe that Tehran has restarted its weapons program.111 Moreover, administration talking points made public September 25, 2009, stated that the community still assesses that ―Iran halted its nuclear weapons program in 2003.‖ Other factors also suggest that Iran may not have an active nuclear weapons program. First, the IAEA has resolved several of the outstanding issues described in the August 2007 Iran-IAEA work plan and has apparently not found additional evidence of a nuclear weapons program. Indeed, the agency has not discovered significant undeclared Iranian nuclear activities for several years (although, as noted above, the IAEA‘s ability to monitor Iran‘s nuclear facilities has decreased). Second, Tehran, beginning in 2003, has been willing to disclose previously undeclared nuclear activities to the IAEA (though, as previously discussed, Iran has not been fully cooperating with the agency). Third, Iran made significant changes to the administration of its nuclear program in fall 2003—changes that produced greater openness with the IAEA and may have indicated a decision to stop a nuclear weapons program.112 Fourth, as noted above, Iranian officials have stated numerous times that Tehran is not seeking nuclear weapons, partly for religious regions—indeed, Khamenei has issued a fatwa against nuclear weapons, according to Iranian officials.113 A change in this stance could damage Iranian religious leaders‘ credibility. Moreover, Mark Fitzpatrick of the International Institute of Strategic Studies argued in May 2008 that ―given the pervasive religiosity of the regime, it is unlikely that Iran‘s supreme leader would be secretly endorsing military activity in explicit contradiction of his own religious edict.‖114 Fifth, Iranian officials have argued that nuclear weapons would not improve the country‘s national security because Iran would not be able to compete with the arsenals of larger countries, such as the United States.115 Moreover, the U.S.-led spring 2003 invasion of Iraq,

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which overthrew Iraqi leader Saddam Hussein and thereby eliminated a key rival of Iran, may also have induced Tehran to decide that it did not need nuclear weapons.

Living with Risk Other findings of the NIE indicate that the international community may, for the foreseeable future, have to accept some risk that Iran will develop nuclear weapons. According to the 2007 NIE, ―only an Iranian political decision to abandon a nuclear weapons objective would plausibly keep Iran from eventually producing nuclear weapons—and such a decision is inherently reversible.‖ The estimate also asserted that ―Iran has the scientific, technical and industrial capacity eventually to produce nuclear weapons if it decides to do so,‖ adding that, ―since fall 2003, Iran has been conducting research and development projects with commercial and conventional military applications—some of which would also be of limited use for nuclear weapons.‖ This is not to say that an Iranian nuclear weapons capability is inevitable; as noted above, Iran does not yet have such a capability. But Tehran would likely need to accept additional constraints on its nuclear program in order to provide the international community with confidence that it is not pursuing a nuclear weapon.

Other Constraints on Nuclear Weapons Ambitions

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Although the production of fissile material is widely considered to be the most difficult step in nuclear weapons development, Iran would, even with the ability to produce HEU, still face challenges in producing nuclear weapons, such as developing a workable physics package and effective delivery vehicles. A 1978 CIA report points out that there is a great difference between the development and testing of a simple nuclear device and the development of a nuclear weapons system, which would include both relatively sophisticated nuclear designs and an appropriate delivery system.116

Although developing and producing HEU-based nuclear weapons covertly would probably be Tehran‘s preferred option, such a path would present additional challenges. A 2005 report from the International Institute for Strategic Studies concluded that ―an Iranian planner would have little basis for confidence that significant nuclear facilities could be kept hidden.‖117 Tehran would need to hide a number of activities, including uranium conversion, the movement of uranium from mines, and the movement of centrifuge feedstock.118 Alternatively, Tehran could import uranium ore or centrifuge feedstock, but would also need to do so covertly. Furthermore, Iran could produce only fairly simple nuclear weapons, which are not deliverable by longer-range missiles, without conducting explosive nuclear tests. Such tests, many analysts argue, would likely be detected.119 It is also worth noting that moving from the production of a simple nuclear weapon to more sophisticated nuclear weapons could take several additional years.120

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End Notes

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1

The United States and Iran signed a nuclear cooperation agreement in 1957; it entered into force in 1959. The two countries negotiated another such agreement during the 1970s, but it was never concluded. For a summary of these negotiations, see William Burr, ―A Brief History of U.S.-Iranian Nuclear Negotiations,‖ Bulletin of the Atomic Scientists, January/February 2009. 2 For example, the United States was willing to supply Iran with reprocessing technology, according to 1975 and 1976 National Security Council documents. Tehran also had a 1976 contract for a pilot uranium-enrichment facility using lasers (see Iran, Report by the Director General, GOV/2007/58, November 15, 2007). Additionally, Iran had contemplated building its own enrichment facility, according to a 1976 State Department cable (U.S. Embassy Tehran Airgram A-76 to State Department, ―The Atomic Energy Organization of Iran,‖ April 15, 1976). 3 Prospects for Further Proliferation of Nuclear Weapons, Special National Intelligence Estimate, August 23, 1974. A 1975 Department of State memorandum referred to the ―uncertainty over‖ Iran‘s ―long-term objectives despite its NPT status.‖ (―Memorandum for the Assistant to the President for National Security Affairs: Department of State Response to NSSM 219 (Nuclear Cooperation with Iran),‖ April 18, 1975). A 1988 CIA report (Middle East-South Asia: Nuclear Handbook) indicated that Iran conducted nuclear weapons ―design work,‖ before the 1979 revolution. 4 Middle East-South Asia: Nuclear Handbook, Central Intelligence Agency, May 1988. 5 The Dynamics of Nuclear Proliferation: Balance of Power and Constraints, National Intelligence Council, September 1985. 6 Iran‘s previous regime also made these arguments for pursuing nuclear power. For example, according to a 1976 State Department cable, the head of the Atomic Energy Organization of Iran cited them as reasons for starting an ambitious nuclear program. (U.S. Embassy Tehran Airgram A-76 to State Department, ―The Atomic Energy Organization of Iran,‖ April 15, 1976). Ambassador Ali Asghar Soltanieh, Iran‘s Permanent Representative to the International Atomic Energy Agency, has explained that nuclear power will only meet ―perhaps a small portion‖ of the projected national electricity demand. ―Interview with Iran‘s Ambassador to IAEA,‖ Campaign Against Sanctions and Military Intervention in Iran, June 29, 2008 (published July 2, 2008). http://www.campaigniran.org/casmii/index.php?q=node/ 5439. 7 ―Iran to Follow Nuclear Timetable Regardless of IAEA Reports – Official,‖ Islamic Republic of Iran News Network, February 25, 2009. 8 ―Iran Nuclear Spokesman Interviewed on Situation,‖ E’temad, November 9, 2008. Iran has stated that construction on the 360 MW reactor is to start in 2013. The reactor is to be completed in 2016. See ―Foreign Firms Interested to Build Darkhovin Nuclear Plant - Iran Official,‖ Mehr News Agency, October 19, 2008, and ―Bushehr Plant To Be Inaugurated By Mid October 2008 - Iranian Official,‖ Islamic Republic of Iran News Network, January 30, 2008. 9 ―Iranian Nuclear Chief Salehi Describes Talks With IAEA Chief ElBaradei,‖ Tehran Vision of the Islamic Republic of Iran Network 1, October 4, 2009. 10 Mehr News Agency, October 19, 2008. 11 Tehran Vision of the Islamic Republic of Iran Network 1, October 4, 2009. 12 ―Weekly Briefing of the Foreign Ministry Spokesman,‖ November 10, 2008. 13 Islamic Republic of Iran News Network, April 9, 2009. 14 Jose Goldemberg, ―Looking Back: Lessons From the Denuclearization of Brazil and Argentina,‖ Arms Control Today, April 2006. 15 See James Acton, ―The Problem with Nuclear Mind Reading,‖ Survival, February-March 2009, pp. 119-42; Paul M. Cole, ―Atomic Bombast: Nuclear Weapon Decisionmaking in Sweden 1945–1972,‖ The Henry L. Stimson Center, 1996; ―Neutral States: Sweden and Switzerland,‖ in T.V. Paul , Power Vs. Prudence: Why Nations Forgo Nuclear Weapons (Montreal: McGill University Press), 2000, pp. 84-98; and Bruno Tertrais, ―Has Iran Decided to Build the Bomb? Lessons from the French Experience,‖ January 30, 2007, available at http://www.carnegieendowment.org/ publications/index. cfm?fa=view&id=1 8993. 16 ―Soltaniyeh: Iran Has No Alternative But To Enrich Uranium,‖ Islamic Republic News Agency, October 2, 2008; Paul Kerr, ―U.S. Offers Iran Direct Talks,‖ Arms Control Today, June 2006; ―Interview with Iran‘s Ambassador to IAEA,‖ 2008. 17 Highly enriched uranium typically contains over 90% uranium-235, whereas low-enriched uranium used in nuclear reactors typically contains less than 5% uranium-235. 18 For a detailed description of the nuclear fuel cycle, see CRS Report RL34234, Managing the Nuclear Fuel Cycle: Policy Implications of Expanding Global Access to Nuclear Power, coordinated by Mary Beth Nikitin. 19 For a detailed description of Iran‘s compliance with its international obligations, see CRS Report R40094, Iran’s Nuclear Program: Tehran’s Compliance with International Obligations, by Paul K. Kerr. 20 ―Interview With IAEA Boss Mohamed ElBaradei,‖ Der Spiegel, June 11, 2008.

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21

Gary Samore, Former Senior Director for Nonproliferation and Export Controls on the National Security Council, personal communication June 5, 2008; Director of Central Intelligence George J. Tenet, ―DCI Remarks on Iraq‘s WMD Programs,‖ February 5, 2004, available at https://www.cia.gov/news-information/speechestestimony/2004/ tenet_georgetownspeech_02052004.html. 22 The IAEA does have other investigative tools, such as monitoring scientific publications from member-states. 23 NPT states are not required to conclude additional protocols. However, applicable UN Security Council resolutions require Iran to conclude such a protocol. 24 The text of the agreement is available at http://www.iaea.org/NewsCenter/Focus/IaeaIran/statement_iran21 102003.shtml. Iran signed its additional protocol in December 2003, but has not ratified it. 25 The proposal text is available at http://armscontrol.org/pdf/20060606_Iran_P5+1_Proposal.pdf. Prior to late May 2006, the United States refused to participate in direct talks with Iran about its nuclear program. In March 2005, Washington had offered some limited incentives for Iran to cooperate with the E3. (See Kerr, Arms Control Today, June 2006). For more information about the state of international diplomacy with Iran, see CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman. 26 The revised proposal text is available at http://www.auswaertiges-amt.de/diplo/de/Aussenpolitik/Themen/ Abruestung/IranNukes/Angebot-e33 -0806 14.pdf. 27 Iran had also presented a proposal to the P5+1 in May 2008. See Peter Crail, ―Proposals Offered on Iranian Nuclear Program,‖ Arms Control Today, May 2008. The proposal text is available at http://www.iaea.org/Publications/ Documents/Infcircs/2008/infcirc729.pdf. 28 Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006), 1747 (2007) and 1803 (2008) in the Islamic Republic of Iran, Report by the Director General, GOV/2008/4, February 22, 2008. 29 ―Iranian FM: No Discussions on Joining Additional Protocol,‖ Fars News Agency, October 7, 2009. 30 The resolution text is available at http://un.org/News/Press/docs/2008/sc9459.doc.htm. The resolutions also require Iran to suspend work on its heavy water-related projects. 31 Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006), 1747 (2007), 1803 (2008) and 1835 (2008) in the Islamic Republic of Iran, Report by the Director General, GOV/2009/55, August 28, 2009. 32 The proposal text may be found at http://documents.propublica.org/iran-nuclear-program-proposal#p=1. 33 Unless otherwise noted, this section is based on an October 1, 2009 background briefing by senior U.S. officials; ElBaradei‘s remarks during an October 4, 2009 press conference; an October 13 French Foreign Ministry briefing; an analyst interview with a U.S. official; Mark Hibbs, ―Six Nations Might Place Conditions on Reactor Fuel Supply to Iran,‖ Nuclear Fuel, October 5, 2009; ―Iran to Provide 20 % Fuel if Probable Deal with West Fails: AEOI,‖ Iranian Students News Agency, October 10, 2009; and ―Iran Foreign Ministry Spokesman‘s Weekly News Conference,‖ Iranian News Network Channel, October 12, 2009. 34 The text of the work plan is available at http://www.iaea.org/Publications/Documents/Infcircs/2007/ infcirc711.pdf. 35 These issues included plutonium experiments, research and procurement efforts associated with two types of centrifuges, operations of a uranium mine, and experiments with polonium-210, which (in conjunction with beryllium) is used as a neutron initiator in certain types of nuclear weapons. 36 For more information about Iran‘s ballistic missile program, see CRS Report RS22758, Iran’s Ballistic Missile Programs: An Overview, by Steven A. Hildreth. 37 In a September 28, 2008 letter to the IAEA, Iran described some characteristics of the documents discussed above. The letter stated that some of the information from the United States was shown to Iranian officials as PowerPoint presentations. Additionally, some of the documents are ―in contradiction with typical standard Iranian documentation‖ and lack ―classification seals,‖ the letter said. See, Permanent Mission of the Islamic Republic of Iran, Explanatory Comments by the Islamic Republic of Iran on the Report of the IAEA Director General to the September 2008 Board of Governors (GOV/2008/38), September 28, 2008. INFCIRC/737. Iran has complained that the IAEA has not provided Tehran with original versions of some documentation related to the alleged ―military dimensions‖ of Iran‘s nuclear program. Several reports from ElBaradei have stated that the agency has not had permission to provide this documentation from the governments which provided it. In his August 2009 report, ElBaradei again called on such governments to authorize the IAEA to share additional information with Iran. 38 For a detailed discussion of this information, as well as the documents concerning Iran‘s nuclear weapons related studies, see Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006), 1747 (2007), and 1803 (2008) in the Islamic Republic of Iran, Report by the Director General, GOV/2008/15, May 26, 2008. Excerpts of related internal IAEA documents are available at http://www.isis-online.org/ publications/iran/IAEA_info_3October2009.pdf and in George Jahn, ―Nuke Agency Says Iran Can Make Bomb,‖ Associated Press, September 17, 2009. 39 GOV/2008/4. 40 GOV/2008/15. 41 GOV/2008/15.

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―Iran not to Answer Calls Beyond NPT,‖ Fars News Agency, November 20, 2008; ―Tehran Will Have Comprehensive Interaction with IAEA: Official,‖ Islamic Republic News Agency, November 19, 2008; INFCIRC/737. 43 GOV/2008/4. 44 See, for example, then-Undersecretary of State for U.S. Arms Control And International Security Robert Joseph‘s testimony before the Senate Committee on Foreign Relations, February 9, 2006; and then-Director of Research Institute for National Strategic Studies National Defense University Stephen Cambone‘s testimony before the Senate Committee on Governmental Affairs, September 21, 2000. 45 Available at http://odni.gov/press_releases/20071203_release.pdf. 46 ―Aqazadeh: Iran Heralds Peaceful Nuclear Program,‖ Islamic Republic News Agency, April 8, 2008. 47 Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006), 1747 (2007), 1803 (2008) and 1835 (2008) in the Islamic Republic of Iran, Report by the Director General, GOV/2009/35, June 5, 2009. 48 GOV/2008/15. According to this report, Iran is planning to install 16 cascade units, each containing 18 164centrifuge cascades. Tehran has previously told the agency that it intends to install over 50,000 centrifuges; see Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Report by the DirectorGeneral, GOV/2004/83. Gholamreza Aghazadeh, who headed Iran‘s Atomic Energy Organization, also said in February 2009 that Iran would install 50,000 centrifuges (―Iran to Follow Nuclear Timetable Regardless of IAEA Reports – Official,‖ Islamic Republic of Iran News Network, February 25, 2009). 49 Islamic Republic of Iran News Network, February 25, 2009. 50 GOV/2009/55. 51 The IAEA term for this amount of uranium is ―significant quantity,‖ defined as ―[t]he approximate amount of nuclear material for which the possibility of manufacturing a nuclear explosive device cannot be excluded.‖ That amount is 25 kilograms of uranium-235. Some types of weapons could be developed using less uranium235. 52 GOV/2009/55. 53 GOV/2009/55. ElBaradei‘s June 2009 report stated that Iran was testing four other more-advanced centrifuges. 54 Analyst interview with U.S. official, June 25, 2009. 55 Islamic Republic of Iran News Network, February 25, 2009. 56 ―Iran Scientists Build New Generation of Centrifuges - Nuclear Official,‖ Islamic Republic News Agency, September 22, 2009. 57 Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006), 1747 (2007), 1803 (2008) and 1835 (2008) in the Islamic Republic of Iran, Report by the Director General, GOV/2009/8, February 19, 2009. 58 IISS Strategic Comments, ―Nuclear Iran: How Close Is It?,‖ September 2007, available at http://www.iiss.org/ publications/strategic-comments/past-issues/volume-13-2007/volume-13-issue-7/nuclear-iran/; Paul Kerr, ―Iran Continues Security Council Defiance,‖ Arms Control Today, June 2007; analyst interview with State Department official October 28, 2008. 59 Analyst interview with U.S. official, June 25, 2009. 60 Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions, Covering 1 January to 31 December 2008. Available at http://www.dni.gov/reports/Unclassified%20Report%20to%20Congress%20WMD%20Covering%201January %20to%203 1%20December%20200 8.pdf. 61 David Albright, Jacqueline Shire, and Paul Brannan, IAEA Report on Iran: Centrifuge Operation Significantly Improving; Gridlock on Alleged Weaponization Issues, September 15, 2008, available at http://www.isisonline.org/ publications/iran/ISIS_Report_Iran_15September2008.pdf. The report compares data from the previous IAEA reports about the amount of uranium hexafluoride fed into Iran‘s centrifuges. 62 Peter Crail, ―ElBaradei Says Iran Stalls IAEA Inquiry,‖ Arms Control Today, October 2008. 63 David Albright and Jacqueline Shire, IAEA Report on Iran: Centrifuge and LEU Increases; Access To Arak Reactor Denied; No Progress on Outstanding Issues, June 5, 2009. Available at http://isisonline.org/publications/iran/ Iran_IAEA_Report_Analysis_5June2009.pdf. 64 David Albright, Paul Brannan, and Jacqueline Shire, IAEA Report On Iran: Centrifuges Increase; Rate of LEU Production Steady; Progress on Inspection Requests at Arak and Natanz; No Progress on Possible Military Dimensions, August 28, 2009. Available at http://www.isis-online.org/publications/iran/Analysis_ IAEA_Report.pdf. 65 ―A Talk with A.Q. Khan: Pakistan‘s Top Nuclear Scientist Talks About Nuclear Weapons,‖ Jane’s Foreign Report, July 24, 1998. 66 Mark Fitzpatrick, The Iranian Nuclear Crisis: Avoiding Worst-Case Outcomes, Adelphi Paper 398, International Institute of Strategic Studies, May 2008, p. 50. 67 David Albright, Jacqueline Shire and Paul Brannan, Is Iran Running Out of Yellowcake?, Institute for Science and International Security, February 11, 2009. Available at http://isisonline.org/publications/iran/Iran_Yellowcake.pdf; Barak Ravid, ―Israel Slams Clinton Statement on Nuclear

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Iran,‖ Haaretz, July 22, 2009; Mark Fitzpatrick, Statement before the Senate Committee on Foreign Relations, March 3, 2009. 68 Analyst interview with U.S. official, June 25, 2009. 69 This time frame describes the point at which Iran could have enough HEU for a weapon, rather than when Iran could start producing HEU. 70 In responses to Questions for the Record from the Senate Select Committee on Intelligence, which were made public in August 2009, the Director for National Intelligence stated that the Bureau continues to stand by this estimate. 71 The time frame described in the 2007 NIE is the same as one described in a 2005 NIE. 72 See, for example, R. Scott Kemp and Alexander Glaser, ―Statement on Iran‘s Ability to Make a Nuclear Weapon and the Significance of the 19 February 2009 IAEA Report on Iran‘s Uranium-Enrichment Program,‖ March 2, 2009 (available at http://www.princeton.edu/~rskemp/can-iran-make-a-bomb.pdf); R. Scott Kemp, ―Update On Iran‘s Ability to Make a Nuclear Weapon and the Significance of the 5 June 2009 IAEA Report on Iran‘s Uranium-Enrichment Program,‖ June 17, 2009; Albright and Shire, June 5, 2009; and David Albright, Paul Brannan, and Jacqueline Shire, Nuclear Weapon Breakout Scenarios: Correcting the Record, March 18, 2009 (available at http://www.isisnucleariran.org/assets/pdf/Correcting_the_Record.pdf). 73 Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions, January 1-December 31, 2004, available at http://www.odni.gov/reports/ 2004_unclass_report_to_NIC_DO_16Nov04.pdf. 74 For more details about cascade configuration, see Houston G. Wood, Alexander Glaser, and R. Scott Kemp, ―The Gas Centrifuge and Nuclear Weapons Proliferation,‖ Physics Today, September 2008; International Institute for Strategic Studies, Iran’s Strategic Weapons Programmes: A Net Assessment, (UK: Routledge, 2005), pp. 53-54. 75 No state in good standing with the IAEA has ever used this tactic. North Korea restarted its nuclear weapons program after announcing its withdrawal from the NPT in 2003, but the IAEA has never completed an assessment of that country‘s nuclear activities. 76 Unless otherwise noted, this section is based on Iran‘s September 21, 2009 letter to IAEA and September 25 background briefings from U.S. officials, along with associated talking points. 77 ―Iran to Schedule for IAEA Inspection of New N. Plant,‖ Fars News Agency, September 29, 2009. 78 Despite its location, the United States assess that Iran‘s Atomic Energy Organization is responsible for the facility‘s ―development.‖ 79 ―Iran Speaker Says Country has Fully Mastered Nuclear Technology,‖ Islamic Republic News Agency, September 27, 2009. 80 ―West Reaction to Iran‘s Nuclear Enrichment Plant ‗Ludicrous‘ – Official,‖ Vision of the Islamic Republic of Iran Network 2, September 26, 2009. 81 ―Iran to Announce Type of Centrifuges in New Enrichment Plant,‖ Iranian Students News Agency, September 27, 2009. 82 Ibid. ―Press Conference with Mahmoud Ahmadinejad,‖ September 25, 2009. 83 For more information, see CRS Report R40094, Iran’s Nuclear Program: Tehran’s Compliance with International Obligations, by Paul K. Kerr. 84 See, for example, ―Iranian Nuclear Negotiator Says 5+1 Talks ‗Positive‘,‖ Islamic Republic of Iran News Network, October 1, 2009. 85 See, for example, Press Conference with Manouchehr Mottaki, Minister for Foreign Affairs of The Islamic Republic of Iran, Federal News Service, October 1, 2009. 86 ―UK Condemns Iran Missile Test,‖ September 28, 2009. Available at http://www.fco.gov.uk/en/news/latestnews/? view=News&id=20915346. 87 Iran, Report by the Director General, GOV/2007/48, August 30, 2007. 88 ―Iran‘s Exclusively Peaceful Nuclear Programs and Activities,‖ Briefing for NGOs, May 5, 2008, available at http://www.reachingcriticalwill.org/legal/npt/prepcom08/WP/iran_briefing.pdf 89 Despite this claim, Iranian officials stated in September 2009 that Iran needs to obtain more LEU fuel for the reactor. See ―Iran Scientists Build New Generation of Centrifuges,‖ September 22, 2009. 90 Vision of the Islamic Republic of Iran Network 2, September 26, 2009. 91 ―Envoy: Bushehr N. Plant to Go on Stream in Winter,‖ Fars News Agency, July 21, 2009; ―Russia Confirms Launch of Iranian Nuclear Reactor by Year End,‖ RIA Novosti, July 22, 2009. 92 ―Iran‘s Nuclear Chief: Power Plant Tests Nearly Completed,‖ Tehran Voice of the Islamic Republic of Iran Radio 1, September 15, 2009. 93 ―Atomstroyexport Completes Latest Shipment of Fuel to Bushehr Nuclear Plant,‖ Interfax, December 28, 2007. 94 For example, then- Deputy Assistant Secretary of Defense Marshall Billingslea testified before the Senate July 29, 2002, that the United States was ―concerned that the Bushehr nuclear power project is, in reality, a pretext for the creation of an infrastructure designed to help Tehran acquire atomic weapons.‖ Similar concerns are expressed in a 2005 State Department report (Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments, U.S. Department of State, August 2005,

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p.77.) Then-Undersecretary of State for International Security and Arms Control John Bolton told the House International Relations Committee in June 2003 that Iran could build ―over 80 nuclear weapons‖ if it had access to sufficient fuel, operated the reactor for five to six years, and chose to withdraw from the nuclear Nonproliferation Treaty (NPT). This estimate assumes that Iran possesses a reprocessing facility. 95 Estimates for the length of time the spent fuel will have to stay in Iran to cool range from two to five years. See Paul Kerr, ―Iran, Russia Reach Nuclear Agreement,‖ Arms Control Today, April 2005. 96 For example, Iran sanitized a facility where Iranian scientists had enriched uranium, falsely told the IAEA that it had not enriched uranium, and falsely claimed that it had not procured any foreign components for one of its centrifuge programs. 97 Iranian Students News Agency, April 17, 2007; Thomas W. Wood, Matthew D. Milazzo, Barbara A. Reichmuth, and Jeffrey Bedell, ―The Economics Of Energy Independence For Iran,‖ Nonproliferation Review, Vol. 14, No. 1, March 2007. 98 Paul Kerr, ―News Analysis: Behind Iran‘s Diplomatic Behavior,‖ Arms Control Today, June 2006. Perhaps significantly, Iranian officials argued for an independent fuel production capability during the 1970s; see U.S. Embassy Tehran Airgram A-76 to State Department, ―The Atomic Energy Organization of Iran,‖ April 15, 1976. 99 The report says that Iran had responded to ―Western counterproliferation efforts by relying more on legitimate commercial firms as procurement fronts and by developing more convoluted procurement networks.‖ 100 Islamic Republic of Iran News Network, February 25, 2009. 101 See, for example, ―U.S.-Iranian Engagement: The View from Tehran,‖ International Crisis Group, June 2, 2009; Roger Stern, ―The Iranian Petroleum Crisis and United States National Security,‖ Proceedings of the National Academy of Sciences of America, January 2007; and George Perkovich and Silvia Manzanero, ―Plan B: Using Sanctions to End Iran‘s Nuclear Program,‖ Arms Control Today, May 2004. Projections of Iranian oil depletion are not new. A 1975 U.S. government report stated that ―Iran has decided now to introduce nuclear power to prepare against the time – about 15 years in the future – when Iranian oil production is expected to begin to decline sharply.‖ (―Report of the NSSM 219 Working Group Nuclear Cooperation Agreement with Iran,‖ April 1975). 102 Oliver Meier, ―Iran and Foreign Enrichment: A Troubled Model,‖ Arms Control Today, January/February 2006. 103 Robert J. Einhorn, ―Iran‘s Heavy-Water Reactor: A Plutonium Bomb Factory,‖ November 9, 2006, available at http://www.armscontrol.org/pressroom/2006/20061109_Einhorn.asp?print. 104 Prior to the NIE, some non-governmental experts had argued that Iran had stopped its nuclear weapons program. See, for example, Paul Kerr, ―Divided From Within,‖ Bulletin of the Atomic Scientists, November/December 2006; Jeffrey Lewis, ―Iran Roundup: Negotiations and Wonkporn,‖ July 27, 2005, available at http://www.armscontrolwonk.com/703/iran-roundup-negotiations-and-wonkporn; and George Perkovich, Changing Iran’s Nuclear Interests, Policy Outlook, Carnegie Endowment for international Peace, May 2005, available at http://www.carnegieendowment.org/files/PO16.perkovich.FINAL2.pdf. 105 Although the 2005 NIE stated that ―Iran currently is determined to develop nuclear weapons despite its international obligations and international pressure,‖ that assessment was somewhat qualified. Titled ―Iran‘s Nuclear Program: At A Crossroads,‖ the estimate stated that Iran was not ―immovable‖ on the question of pursuing a nuclear weapons program and also addressed the possibility that Tehran may not have had such a program. Moreover, the word ―determined‖ was used in lieu of ―pursuing‖ a nuclear weapon because the authors believed the latter to be a stronger term. The NIE was issued as a Memorandum to Holders of NIE 200 1-15HC, ―Iran‘s Nuclear Weapons Program: Multifaceted and Poised to Succeed, But When?‖ 106 Dafna Linzer and Joby Warrick, ―U.S. Finds that Iran Halted Nuclear Arms Bid in 2003,‖ Washington Post, December 4, 2007; Greg Miller, ―Iran‘s Nuclear Ambitions on Hold, U.S. Agencies Conclude,‖ Los Angeles Times, December 4, 2007; David E. Sanger and Steven Lee Myers, ―Details in Military Notes Led to Shift on Iran, U.S. Says,‖ New York Times, December 6, 2007; Peter Baker and Dafna Linzer, ―Diving Deep, Unearthing a Surprise; How a Search for Iran‘s Nuclear Arms Program Turned Up an Unexpected Conclusion,‖ Washington Post, December 8, 2007. 107 Greg Miller, ―CIA Has Recruited Iranians to Defect; The Secret Effort Aims to Undermine Tehran‘s Nuclear Program,‖ Los Angeles Times, December 9, 2007. 108 David Sanger and William Broad, ―U.S. and Allies Press Iran over Nuclear Plant ‗Deception‘,‖ The New York Times, September 26, 2009. 109 See also the 2008 report to Congress submitted by the DDNI; February 12, 2009 testimony before the Senate Intelligence Committee by Director of National Intelligence Dennis Blair; ―Annual Threat Assessment of the Intelligence Community for the Senate Intelligence Committee,‖ February 12, 2009; and March 10, 2009 testimony before the Senate Armed Services Committee by Director of the Defense Intelligence Agency Michael Maples. 110 ―Remarks of Director of Central Intelligence Agency, Leon E. Panetta, at the Pacific Council on International Policy,‖ May 18, 2009.

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Mark Hosenball, ―Intelligence Agencies Say No New Nukes in Iran: Secret Updates to White House Challenge European and Israeli Assessments,‖ Newsweek, September 16, 2009; David E. Sanger, ―U.S. Says Iran Could Expedite Nuclear Bomb,‖ The New York Times, September 10, 2009. 112 This argument is explained in more detail in Kerr, Bulletin of the Atomic Scientists, 2006. For an in-depth discussion of Iran‘s nuclear decision-making process, see Abbas William Samii, ―The Iranian Nuclear Issue and Informal Networks,‖ Naval War College Review, Winter 2006. 113 Statement by H.E. Dr. M. Javad Zarif, Permanent Representative of the Islamic Republic of Iran Before the Security Council, December 23, 2006. 114 The Iranian Nuclear Crisis, p. 13. 115 Soltanieh, June 29, 2008. 116 Available at http://www.faqs.org/cia/docs/44/0000107983/(UNTITLED)-RE.html. For a more detailed discussion, see Office of Technology Assessment, Technologies Underlying Weapons of Mass Destruction (OTA-BP-ISC-1 15), December 1993. 117 International Institute for Strategic Studies, p. 57. 118 The 2005 IISS report also explains that concealing a plutonium-based nuclear weapons program would be even more difficult (pp. 62-63). 119 For a detailed discussion of this issue, see Steven A. Hildreth, statement before the House Committee on Oversight and Government Reform, Subcommittee on National Security and Foreign Affairs, March 5, 2008, available at http://nationalsecurity.oversight.house.gov/documents/20080305141600.pdf. 120 Iran’s Nuclear and Missile Potential: A Joint Threat Assessment by U.S. and Russian Technical Experts, EastWest Institute, May 2009. pp. 5-6.

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Chapter 5

THE UNITED ARAB EMIRATES NUCLEAR PROGRAM AND PROPOSED U.S. NUCLEAR COOPERATION 

Christopher M. Blanchard and Paul K. Kerr

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SUMMARY The United Arab Emirates (UAE) has embarked on a program to build civilian nuclear power plants and is seeking cooperation and technical assistance from the United States and others. During 2008 and early 2009, the Bush Administration and the UAE government negotiated and signed a memorandum of understanding and a proposed bilateral agreement on peaceful nuclear cooperation pursuant to Section 123 of the Atomic Energy Act (AEA) of 1954. Then-U.S. Secretary of State Condoleezza Rice signed the proposed agreement on peaceful nuclear cooperation with the UAE January 15, 2009. Deputy Secretary of State James Steinberg signed a new version of the agreement May 21; the Obama Administration submitted the proposed agreement to Congress the same day. Under the AEA, Congress has the opportunity to review such a proposed agreement for 90 days of continuous session, after which the agreement becomes effective unless, during that time, Congress adopts a joint resolution disapproving the agreement and the resolution becomes law. According to the Office of the Parliamentarian of the House of Representatives, the 90 days of continuous session for the proposed U.S.-UAE agreement expired October 17, 2009. The UAE cabinet approved the agreement October 26. The two governments need to exchange diplomatic notes in order for the agreement to enter into force. The agreement text states the intent of both governments to cooperate in a number of areas including, but not limited to, the development of the UAE‘s ―civilian nuclear energy use in a manner that contributes to global efforts to prevent nuclear proliferation‖ and, ―the



This is an edited, reformatted and augmented version of a CRS Report for Congress publication dated October 2009.

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establishment of reliable sources of nuclear fuel for future civilian light water reactors deployed‖ in the UAE. To date, some Members of Congress have welcomed the UAE government‘s stated commitments not to pursue proliferation-sensitive nuclear capabilities, such as uranium enrichment or spent fuel reprocessing. Other Members have signaled their intention to weigh the proposed bilateral agreement in light of parallel and specific concerns about the UAE‘s cooperation with international efforts (such as sanctions) to prevent Iran from developing nuclear weapons and ballistic missiles, as well as the potential proliferation or safety risks inherent to exporting U.S. nuclear technology. In the 111th Congress, legislation (H.R. 364) has been introduced that would require President Obama to certify that the UAE has taken a number of steps to strengthen its export controls and stem illicit trade with Iran before any agreement could come into effect or related U.S. exports of nuclear technology to the UAE could be approved. In 2007, the UAE adopted a stronger export control law, but has yet to issue implementing regulations for the law or to fully staff a national export control body to enforce it. In the interim, export control enforcement functions remain the responsibility of authorities in the UAE‘s individual emirates, in coordination with a new national interagency Committee on Commodities Subject to Import and Export Control, established in April 2009. According to UAE officials, cooperation with the United States has resulted in a number of joint interdiction operations. This report provides background information on the UAE nuclear program, reviews developments to date, analyzes proposed nuclear cooperation with the United States, and discusses relevant legislative proposals and options. See also CRS Report RS2 1852, The United Arab Emirates (UAE): Issues for U.S. Policy, by Kenneth Katzman, and CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth Nikitin.

THE UNITED ARAB EMIRATES: BACKGROUND AND U.S. RELATIONS The United Arab Emirates (UAE) is a federation of seven emirates (principalities): Abu Dhabi, Dubai, Sharjah, Ajman, Fujayrah, Umm Al Qawayn, and Ras Al Khaymah. National authority rests in the hands of a Federal Supreme Council, which is composed of the hereditary rulers of the country‘s constituent emirates and elects the national president from among its members. Sheikh Khalifa bin Zayed Al Nahyan, the ruler of Abu Dhabi, was elected UAE President in 2004 following the death of his father Sheikh Zayed bin Sultan Al Nahyan, who had ruled Abu Dhabi since 1966 and served as UAE President since 1971. In practice, the wealthier and more powerful emirates of Abu Dhabi and Dubai exercise the strongest influence over the country‘s affairs; under current convention, the ruler of oil-rich Abu Dhabi serves as the UAE President, and the ruler of the UAE‘s commercial hub, Dubai, serves as Vice President. The Supreme Council appoints the Prime Minister and the Council of Ministers (cabinet), which initiates legislation for ratification by the Supreme Council and the President. The United States and the UAE have enjoyed close and cooperative relations in recent years, in spite of periodic differences with regard to political reform, the Israel-Palestinian conflict, counterterrorism, and U.S. policies regarding Iraq and Iran. Military cooperation and

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The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation 97 arms sales form a key pillar of U.S.-UAE relations. The UAE hosts frequent port calls and shore visits for U.S. naval vessels and allows the U.S. military to use Al Dhafra air base in support of a variety of missions in the U.S. Central Command (CENTCOM) area of operations. In 2007 and 2008, the Bush Administration notified Congress of over $19.4 billion in potential arms sales to the UAE, including what would be the first overseas sale of the Terminal High Altitude Air Defense system. Bilateral trade has increased in recent years, with 2008 U.S. exports valued at over $15.7 billion, making the UAE the largest U.S. export market in the Middle East. The Bush Administration began negotiating a free trade agreement with the UAE in 2004, but did not conclude the negotiations. The United States does not import a significant amount of oil from the UAE. However, the UAE exports over 2 million barrels of oil per day, making it a key global energy producer.

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THE UNITED ARAB EMIRATES NUCLEAR PROGRAM The government of the United Arab Emirates (UAE), like others in the Middle East, has announced plans to acquire nuclear energy production technology as a means of meeting projected national energy consumption needs.1 Renewed global interest in nuclear power has led some experts and observers to express concern that the projected spread of nuclear technology in coming years could contribute to nuclear proliferation. In the Middle East, added scrutiny is often applied to the motives and choices of regional actors regarding nuclear technology because of concern that Iran‘s nuclear program and Israel‘s presumed nuclear weapons may motivate other regional governments to seek nuclear technology for strategic or military purposes. Other concerns about nuclear safety relate to potential terrorist attacks or political instability, both of which have threatened some regional countries in recent years. UAE officials report that they have considered these potential risks carefully, and have announced plans and measures intended to address proliferation and security concerns. While UAE officials stress that final decisions about the scope of the nuclear program and potential international participation have not been made, plans for the program are at an advanced stage and are awaiting final legal authorization. Policymakers and advisers in the government of Abu Dhabi, in consultation with representatives from the other six emirates, have set out an ambitious agenda for the program and are guiding its preliminary implementation. In April 2008, the UAE government issued a policy statement2 that provides a rationale for the country‘s perceived need for nuclear energy and states guiding principles for the nuclear energy program. Nascent operating and regulatory bodies have been formed and are awaiting the passage of authorizing legislation to begin their formal work. The end goal of the program, according to officials and related documents, is to build and operate a ―fleet‖ of nuclear power plants to generate electricity for the UAE, supported by advanced, indigenously managed safety, regulatory, and security agencies. The UAE government pledged $10 million in August 2008 toward an international nuclear fuel bank proposed by the Nuclear Threat Initiative, a non-governmental organization. The bank would be administered by the International Atomic Energy Agency (IAEA),3 which would also implement safeguards on any future UAE nuclear facilities. Mr. Hamad Al Kaabi, UAE Special Representative for International Nuclear Cooperation,

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explained August 7 that the contribution is part of the UAE‘s policy to support multilateral fuel supply efforts—a policy consistent with the country‘s decision to rely on foreign fuel suppliers.

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Rationale UAE officials estimate that their country must expand its power generation and transmission capacity from the current level of 16 gigawatts to 40 gigawatts by 2020 in order to meet projected demand increases, which they estimate will continue growing at a 9% annual rate. In spite of the recent slowdown in global and domestic economic activity, representatives of the UAE nuclear program believe that the energy demand projections they are using to justify and plan the acquisition of nuclear plants remain accurate, particularly in light of planned industrial and commercial projects in energy-intensive sectors in the emirate of Abu Dhabi.4 To date, UAE officials and representatives have not publicly shared economic cost and energy use analyses referred to in briefings on their nuclear program. In arguing for nuclear energy as a solution to the country‘s projected energy needs, the UAE government policy statement concludes that ―known volumes of natural gas that could be made available to the nation‘s electricity sector would be insufficient to meet future demand.‖5 The UAE currently exports roughly 600 million standard cubic feet per day of natural gas to Japan under long-term supply arrangements and imports roughly 2 billion cubic feet of natural gas from Qatar via the underwater Dolphin pipeline system.6 Similarly, UAE officials believe that crude oil and diesel could be ―logistically viable‖ sources of energy, but would impose high economic opportunity costs (as a result of lost export revenue) and environmental costs. Officials determined that coal could be a more economical solution, but would have even greater environmental costs and, as an import, also would raise concerns for the UAE about the security of supply. UAE officials believe that solar and wind energy sources could supply ―only 6-7% of peak electricity demand by 2020,‖ even after ―aggressive development.‖

Development Plans The end goal of the program, according to officials and related documents, is to build and operate a ―fleet‖7 of nuclear power plants to generate electricity for the UAE, supported by advanced, indigenously managed safety, regulatory, and security agencies that will be developed over time and with outside assistance. The UAE government is seeking to bring its first nuclear power plant online by 2017 along with required facilities and equipment for safety, storage, and system management. Under current plans, capacity would expand thereafter to include multiple nuclear power plants. Reports suggest that the UAE is moving forward with a contract bidding and award process, with the goal of selecting a primary contractor or team in late 2009. UAE officials reportedly plan to build in contractor incentives for on-time delivery of a turnkey plant before the ambitious 2017 deadline.8 No specific decisions have been made regarding the source of nuclear fuel for the planned nuclear reactor or on handling spent reactor fuel.

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Current Infrastructure and Regulatory Regime The UAE currently has no nuclear material under IAEA safeguards. It signed the NPT in 1995 and completed a Small Quantities Protocol in 2003, which applies to non-nuclear weapons states that do not have significant nuclear programs or nuclear material. The UAE also has undertaken Technical Cooperation projects with the Agency, some of which are directly related to nuclear electricity generation. For example, a project begun in 1977 advised the government ―on the establishment of a nuclear energy administration.‖ A 1984 project focused on uranium exploration. More recently, a Technical Cooperation project approved in 2005 was designed to assess the ―technical and economic feasibility‖ of a nuclear power and desalination plant. Active IAEA Technical Cooperation projects with the UAE focus on human resources development for atomic energy, feasibility studies for waste management, environmental monitoring, and nuclear accident early warning preparedness and response.9 A national law authorizing the program was adopted by the Federal Supreme Council in early October 2009. According to the State Department, the law, Federal Law 6 of 2009, ―prohibits uranium enrichment and spent fuel reprocessing, creates a Federal Authority for Nuclear Regulation (FANR), and develops a nuclear material licensing and control system.‖10 UAE government representatives report that the UAE sought and received input on its draft nuclear law from the United States, United Kingdom, Japan, Korea, and France.11 In conjunction with the issuance of the law, a Board of Management for the FANR was announced, and the board named former U.S. Nuclear Regulatory Commission Executive Director for Operations Dr. William Travers as the FANR‘s first Director General. A nuclear energy policy advisory board reportedly has been formed, and UAE officials report that its members, though unnamed, include leading international nuclear energy industry officials.12 The UAE has also adopted a law governing export controls, but has not yet issued implementing regulations (see section on ―Export Control Concerns‖). The UAE has also stated that it intends to establish a ―separate nuclear liability regime for third-party compensation modeled on the four as-yet un-ratified IAEA instruments on nuclear liability.‖13 Some limited consulting and contracting between U.S. firms and the UAE related to the UAE‘s proposed nuclear program has already taken place. In August 2008, Virginia‘s Thorium Power Ltd. signed two consulting and advisory services contracts related to the establishment of the Abu Dhabi-based Emirates Nuclear Energy Corporation (ENEC)14 and the FANR. In October 2008, ENEC announced that Colorado‘s CH2M Hill, Inc. was selected for a 10-year contract as the managing agent for the evaluation and design stage of the nuclear energy program. Pennsylvania- based Rizzo and Associates Inc., has been hired to survey potential nuclear plant sites in the UAE. The contracts were signed with the government of Abu Dhabi.

PROPOSED U.S.-UAE COOPERATION Emirates Nuclear Energy Corporation (ENEC) officials have expressed interest in establishing joint ventures with U.S. firms for the design, construction, and operation of nuclear power plants. ENEC also is seeking to sign contracts for the specialized training of

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operations, security, and regulatory personnel in order to expand the indigenous human capital base within the UAE for independent management of planned nuclear facilities. During 2008 and early 2009, the Bush Administration and the UAE government negotiated and signed a Memorandum of Understanding (MOU) (see below) and a proposed bilateral agreement on peaceful nuclear cooperation pursuant to Section 123 of the Atomic Energy Act (AEA) of 1954.

Memorandum of Understanding

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On April 21, 2008, the United States and the UAE signed a MOU ―Concerning Cooperation in Peaceful Uses of Nuclear Energy.‖ The MOU states that the two countries ―intend to cooperate, subject to their respective national laws,‖ in a variety of nuclear activities. The MOU is a statement of intent regarding future cooperation, but is not legally binding. Although such memoranda are not prerequisites for concluding future nuclear cooperation agreements, the State Department has argued that they are useful tools for cooperating with countries which are interested in the responsible use of nuclear energy because they create opportunities to solicit specific commitments with regard to safeguards and technology choices. An April 21, 2008, State Department press release described the U.S.-UAE MOU as a ―tangible expression of the United States‘ desire to cooperate with states in the Middle East, and elsewhere, that want to develop peaceful nuclear power in a manner consistent with the highest standards of safety, security and nonproliferation.‖ A similar MOU was concluded with Saudi Arabia in May 2008.

Proposed Bilateral Agreement Pursuant to Section 123 of the Atomic Energy Act of 1954 On May 21, 2009, Deputy Secretary of State James Steinberg and UAE Ambassador to the United States Yousef Al Otaiba signed the text of a bilateral agreement on peaceful nuclear cooperation. Although then-Secretary of State Condoleezza Rice and UAE Foreign Minister Abdullah bin Zayed Al Nahyan signed a similar agreement this past January, the two governments reopened the text for negotiation after the Obama administration took office. Under the Atomic Energy Act of 1954 (AEA), all significant nuclear cooperation with other countries requires a peaceful nuclear cooperation agreement. Such agreements, which require congressional approval, are ―framework‖ agreements which set the terms of reference and provide authorization for cooperation. The AEA includes requirements for an agreement‘s content, presidential determinations, and other supporting information to be submitted to Congress, conditions affecting the implementation of an agreement once it takes effect, as well as procedures for Congress to consider and approve the agreement (see ―Nuclear Cooperation Agreements, Approval Process, and Proposed Changes‖ below). The agreement would enter into force on the date when the two governments ―exchange diplomatic notes informing each other that they have completed all applicable requirements.‖ According to the proposed U.S.-UAE agreement, the two countries ―intend to cooperate‖ on a variety of nuclear activities, including

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The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation 101     

  

Developing ―requirements for grid-appropriate power reactors and fuel service arrangements;‖ Promoting the ―establishment of a reliable source of nuclear fuel for future civil light water nuclear reactors;‖ ―Civil nuclear energy training, human resource and infrastructure development;‖ Cooperating on nuclear security and nonproliferation, ―including physical protection, export control and border security;‖ Developing the UAE‘s ―civil nuclear energy use in a manner that supports global efforts to prevent nuclear proliferation, including, for example, the Global Nuclear Energy Partnership;‖15 Applying ―radioisotopes and radiation in industry, agriculture, medicine and the environment;‖ Managing ―radioactive waste and spent fuel;‖ and Identifying ―uranium mining and milling resources.‖

According to the agreement, cooperation could include

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    

―Exchange of scientific and technical information and documentation;‖ ―Exchange and training of personnel;‖ ―Organization of symposia and seminars;‖ ―Provision of relevant technical assistance and services;‖ Transfers of ―material, equipment and components.‖

The agreement contains a variety of provisions which are required by the AEA and are designed to ensure that the UAE‘s nuclear program remains exclusively for peaceful purposes. It also includes two provisions which are not found in any other U.S. nuclear cooperation agreement. First, the agreement provides that the UAE bring into force its Additional Protocol to its IAEA safeguards agreement before the United States licenses ―exports of nuclear material, equipment, components, or technology‖ pursuant to the agreement. The IAEA Board of Governors approved the Protocol March 3. The UAE signed it April 8, but has not yet brought it into force. Such protocols give IAEA officials greater access to an NPT state‘s nuclear-related facilities and information. Second, the agreement states that the UAE shall not possess sensitive nuclear facilities within its territory or otherwise engage in activities within its territory for, or relating to, the enrichment or reprocessing of material, or for the alternation in form or content (except by irradiation or further irradiation or, if agreed by the Parties, post-irradiation examination) of plutonium, uranium 233, high enriched uranium, or irradiated source or special fissionable material.

A May 21 letter to Congress, which President Obama submitted along with the agreement, described this provision as a ―legally binding obligation.‖ According to the Nuclear Proliferation Assessment Statement submitted with the agreement, this provision ―survives any termination of the Agreement so long as nuclear items subject to the Agreement remain in the territory of the UAE or under its jurisdiction or control anywhere.‖

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Furthermore, the agreement provides the United States with the right to terminate nuclear cooperation and to require the return of any nuclear ―material, equipment or components ... and any special fissionable material produced through their use‖ if, after the agreement‘s entry into force, the UAE ―possesses sensitive nuclear facilities within its territory or otherwise engages in activities within its territory relating to enrichment of uranium or reprocessing of nuclear fuel.‖16 Another provision, which is not typically included in nuclear cooperation agreements, requires both parties to give ―due consideration ... to non-proliferation and physical protection aspects‖ when selecting a storage facility for special fissionable material.17 According to the agreement, the United States may also require that any special fissionable material that has been transferred to the UAE or ―used in or produced through the use of any material or equipment‖ transferred pursuant to the agreement be transferred to either the United States or an unspecified ―third country‖ if Washington ―considers that exceptional circumstances of concern from a nonproliferation standpoint so require.‖ A 1981 U.S. nuclear cooperation agreement with Egypt contains a similar restriction. It is worth noting that an Agreed Minute to the U.S.-UAE agreement includes a provision which establishes its conditions as minimum standards for future such U.S. agreements in the Middle East. Stating that ―the fields of cooperation, terms and conditions‖ accorded by the U.S.-UAE agreement ―shall be no less favorable in scope and effect than those which may be accorded, from time to time, to any other non-nuclear-weapon State in the Middle East in a peaceful nuclear cooperation agreement,‖ the Minute explains that, in the event that Washington concludes a more- favorable agreement with another regional government, the United States will, at the UAE‘s request, consult with the UAE ―regarding the possibility of amending‖ the agreement in order to make its terms equally favorable to the new agreement. A similar provision in the U.S.-Egypt agreement meant that the United States had to ensure that the agreement with the UAE would be at least as stringent. Since the latter agreement is more stringent, it has established a higher standard for future such U.S. agreements in the region.18 (See the Appendix). Additionally, the U.S.-UAE agreement provides a potential way for the UAE to transfer spent nuclear fuel to other countries. The Agreed Minute states that the UAE may transfer spent nuclear fuel to France or the United Kingdom for storage or reprocessing. In the past, such advance U.S. consent has been given only to Japan, Switzerland, and Norway.19 The transferred material is to be held within EURATOM, and any separated plutonium cannot be returned to the UAE without additional U.S. consent.20 21 According to the agreement, approval for such UAE spent fuel transfers would be subject to several conditions, including the UAE‘s adherence to its declared policy of refraining from enrichment and reprocessing. The UAE may also not engage in fabricating nuclear fuel containing plutonium. Additionally, the United States can terminate an agreement regarding spent fuel transfers if Washington decides that the UAE has not met one of the relevant conditions or if the United States ―considers that exceptional circumstances of concern from a non-proliferation or security standpoint so require.‖ The agreement explains that ―[s]uch circumstances include, but are not limited to, a determination ... that the approval cannot be continued without a significant increase of the risk of proliferation or without jeopardizing its national security.‖

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Nuclear Cooperation Agreements, Approval Process, and Proposed Changes As noted, all significant nuclear cooperation22 with other countries requires a peaceful nuclear cooperation agreement.23 Section 123 of the Atomic Energy Act (AEA) specifies that proposed nuclear cooperation agreements are to include the terms, conditions, duration, nature, and scope of cooperation. It also requires that any such agreement meet a series of nonproliferation criteria and that the President submit any such agreement to the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations. The Department of State is required to provide the President an unclassified Nuclear Proliferation Assessment Statement (NPAS), which the President is to submit to the committees of referral along with the agreement. The State Department also is required to provide a classified annex to the NPAS, prepared in consultation with the Director of National Intelligence. The NPAS is meant to explain how a proposed agreement would meet the aforementioned nonproliferation criteria. The President also must make a written determination ―that the performance of the proposed agreement will promote and will not constitute an unreasonable risk to, the common defense and security.‖ President Bush issued such a determination November 14, 2008.24 President Obama issued an identical determination May 19, 2009, and submitted the agreement, along with the unclassified NPAS, May 21. President Obama also submitted the classified NPAS. Under the AEA, Congress has the opportunity to review a 123 agreement for two time periods totaling 90 days of continuous session.25 The President must submit the text of the proposed nuclear cooperation agreement, along with required supporting documents (including the unclassified NPAS) to the House Foreign Affairs Committee and the Senate Foreign Relations Committee. The President is to consult with the committees ―for a period of not less than 30 days of continuous session.‖ After this period of consultation, the President is to submit the agreement to Congress, along with the classified annex to the NPAS and a statement of his approval of the agreement and determination that it will not damage the national security interests of the United States. This action begins the second period, which spans 60 days of continuous session. In practice, the President has submitted the agreement to Congress, along with the unclassified NPAS, its classified annex, and his approval and determination, at the beginning of the full 90- day period. The 60-day period has been considered as following immediately upon the expiration of the 30-day period. If the President has not exempted the agreement from any requirements of Section 123a., it becomes effective at the end of the 60-day period unless, during that time, Congress adopts a joint resolution disapproving the agreement and the resolution becomes law.26 The proposed agreement with the UAE is not an exempt agreement. In the 110th Congress, some Members of Congress proposed several amendments to the AEA that would have changed the AEA‘s procedures for the negotiation and approval of peaceful nuclear cooperation agreements.27 For example, H.R. 7316, which Representative Ileana Ros-Lehtinen introduced in December 2008, would have required Congress to enact a joint resolution of approval before any peaceful nuclear cooperation agreement could become effective. As noted above, such agreements currently become effective unless Congress enacts a joint resolution of disapproval. The bill also proposed adding a section to the AEA which would have required the President to keep the House Foreign Affairs Committee and the Senate Foreign Relations Committee ―fully and currently informed of any initiative or negotiations relating to a new or amended agreement for peaceful nuclear cooperation ...prior

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to the President‘s announcement of such initiative or negotiations.‖ The proposed section also would have mandated periodic Presidential consultation with the committees about the progress of negotiations concerning such agreements. In the 111th Congress, H.R. 547, which Representative Ros-Lehtinen introduced January 15, 2009, contains the same language.

ISSUES FOR CONGRESS

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Although the final text of the proposed U.S.-UAE nuclear agreement was agreed in early November 2008, the Bush Administration, reportedly at the UAE‘s request, did not submit the agreement to the 110th Congress.28 After the Obama Administration took office, the UAE agreed to reopen the text for negotiation. On May 21, 2009, the Administration submitted the agreement to Congress to begin the consultation periods required under the AEA. Some Members of Congress welcomed the UAE government‘s stated commitments to foreswear proliferation- sensitive nuclear capabilities, such as uranium enrichment or spent fuel reprocessing. Other Members signaled their intention to evaluate the proposed bilateral agreement in light of parallel and specific concerns about the UAE‘s cooperation with international efforts to prevent Iran from developing nuclear weapons and the potential proliferation or safety risks inherent to exporting U.S. nuclear technology.29 Broader diplomatic implications of the proposed agreement also were being weighed by concerned parties on all sides. The agreement, however, may now go into effect following an exchange of diplomatic notes because the 90 days of continuous session expired on October 17, 2009. State Department spokesperson Ian Kelly told reporters October 22 that the United States has ―completed all ... internal procedures‖ for the agreement to enter into force. The UAE cabinet approved the agreement October 26.30

Congressional Concerns Export Control Concerns Since 2001, the UAE has been under increased U.S. scrutiny as an alleged transshipment point for military and dual-use exports to Iran, as an alleged hub of operations for weapons proliferators,31 and as an alleged transit zone and financial conduit for terrorists and money launderers. At present, particular attention remains focused on U.S. concerns about the UAE government‘s willingness and ability to halt transfers of militarily sensitive technology to Iran. Since late 2008, some Members of Congress have claimed that the UAE has not acted sufficiently to halt transfers of militarily sensitive technology to Iran and should not be able to conclude a nuclear cooperation agreement with the United States until the UAE government has taken additional measures against Iranian procurement activities of concern. Administration and UAE officials highlight steps taken by the UAE in recent years to strengthen export controls and to take action against entities suspected of illicit proliferation activities, including targets associated with Iran. The United States government has stated publicly that some UAE-based entities are involved in Iranian weapons-related procurement activities. For example, an October 2008 Department of Justice fact sheet states that eight companies, five of which are based in the

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The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation 105 UAE, were charged the previous month with crimes related to their participation in exporting dual-use items to Iran. Additionally, two men were indicted in July 2008 for ―participation in a conspiracy to export U.S.-made military aircraft parts to Iran‖ via a company based in the UAE, according to the fact sheet.32 Evidence also suggests that UAE-based entities are involved in procurement activities connected to Iran‘s nuclear and ballistic missile programs. For example, the Department of the Treasury designated two such entities under Executive Order 13382, which freezes assets under U.S. jurisdiction belonging to designated foreign entities engaged in activities related to the proliferation of Weapons of Mass Destruction (WMD). Specifically, the Treasury Department designated Oriental Oil Kish in October 2007 for unspecified ―proliferation activities.‖ Oriental Oil Kish is an entity affiliated with Iran‘s Islamic Revolutionary Guard Corps (IRGC), a department press release said, adding that the IRGC develops and tests ballistic missiles. In September 2008, the Treasury Department similarly designated Oasis Freight Agencies as a company affiliated with the Islamic Republic of Iran Shipping Lines (IRISL). Adam Szubin, director of the department‘s Office of Foreign Assets Control, indicated during a September 10, 2008, press conference that IRISL has procured items for Iran‘s ballistic missile programs. The Treasury Department has also designated other UAE-based entities under the same executive order because of their ties to Iranian banks which, according to the United States, are involved in proliferation activities. For example, the Department designated Melli Investment Holding International and BMIIC International General Trading Ltd. in March 2009 because of their ties to Iran‘s Bank Melli, which, according to a March 3 Treasury Department statement, has been involved in procurement activities and other forms of support for Iran‘s nuclear and missile programs. More recently, the Treasury Department announced May 12, 2009, that it had specifically designated several UAE-based branches of that bank.33 Additionally, the Department the same day designated the UAE office of Persia International Bank, a subsidiary of Bank Mellat. The Department stated in October 2007 that Bank Mellat has provided ―banking services in support of Iran‘s nuclear entities.‖ To place UAE-based entities‘ proliferation role in context, the U.S. government had, as of March 3, 2009, designated approximately 107 non-UAE companies, based in Iran and elsewhere, under Executive Order 13382, though not necessarily for exports to Iran. Moreover, the UAE is not the only conduit for suspicious goods destined for Iran; Tehran has also used a network based in Malaysia for procuring dual-use items. Concerns about suspicious transfers to Iran prompted U.S. action in 2007 to encourage the UAE to improve its national export control system. In February 2007, the U.S. Department of Commerce released an advanced notice of proposed rule-making that would have created a new export control designation known as ―Country Group C‖ that would have established license requirements on exports and re-exports to countries that represent a diversion or transshipment risk for goods subject to the Export Administration Regulations.34 Although no countries were mentioned in the notice, the proposal was widely considered to be directed at the UAE. 35 In August 2007, the UAE adopted a stronger national export control law, but, as of September 2009, the government had yet to issue implementing regulations for the law or to fully staff a national export control body to enforce it. In the interim, export control enforcement functions remain the responsibility of authorities in the UAE‘s individual emirates, and are being carried out in coordination with a newly established national

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interagency Committee on Commodities Subject to Import and Export Control. The Committee was authorized in April 2009. The Foreign Ministry serves as the chair, and other members include the Interior Ministry, the Armed Forces, the Ministry of Economy, and the Federal Customs Authority. The Committee met in May 2009 and reportedly discussed ―creating a mechanism to implement the law.‖36 Minister of State for Foreign Affairs Dr. Anwar Mohammed Gargash said in a statement released in conjunction with the meeting that, ―We will not compromise on issues of security and our export control reflects our intention to ensure tough safeguards over the movement of sensitive materials.‖ UAE Ambassador to the United States Yousef Al Otaiba described the law as a ―work in progress‖ during a June 3, 2009, briefing. U.S. cooperation with national and emirate level officials on proliferation issues appears to be strong. A bilateral nonproliferation working group meets annually to review and discuss nonproliferation issues of shared concern. In a September 2008 letter to then-U.S. Secretary of Commerce Carlos Gutierrez, Ambassador Otaiba detailed six joint and unilateral interdictions on Iran-bound ships completed since June 2008.37 More recently, the UAE seized ―arms and related materials‖ from a ship en route to Iran, according to Australian officials. The UAE conducted the seizure, which reportedly took place in late July or early August 2009, pursuant to UN Security Council resolution 1874.38 The UN committee charged with monitoring implementation of the sanctions is investigating the matter, U.S. Permanent Representative to the United Nations Ambassador Susan Rice told reporters September 14. Otaiba‘s letter further stated that ―the UAE fully supports and has vigorously enforced United Nations resolutions barring the shipment of sensitive materials and technologies to Iran.‖ The UAE also has ―closed dozens of international and local companies involved in the transshipment of dual-use and controlled materials,‖ according to the letter, which also highlighted the government‘s participation in several U.S. security initiatives, including the Container Security Initiative, the Proliferation Security Initiative, and the Department of Energy Megaports Initiative. UAE officials report they remain committed to fully implementing the 2007 law at the national level, including clarifying roles and responsibilities for export control enforcement. The UAE‘s Central Bank has also taken steps to pressure Iran. According to the February 2009 International Narcotics Control Strategy Report, the bank ―has ordered financial institutions to cease transfers on behalf of designated entities and to refrain from entering into new commitments for grants, financial assistance, and concession loans to the Iranian Government.‖ The United Kingdom‘s Export Control Organization has also named two entities located in the UAE, Mileace and Tammam Trading, as possibly being involved in procurement activities for Iran‘s WMD programs.39

Nonproliferation Concerns The most proliferation-sensitive part of a nuclear power program is the capability to produce fuel for nuclear reactors, either by enriching uranium or reprocessing spent nuclear fuel to obtain plutonium. Low-enriched uranium is used as fuel for nuclear reactors. Both highly enriched uranium and plutonium can be used as fuel in some types of nuclear reactors but are also used as fissile material in nuclear weapons. The dual-use nature of nuclear fuel facilities frequently generates concern that ostensibly peaceful facilities may aid nuclear weapons programs.

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The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation 107 The April MOU states that the UAE has agreed to the policy commitments described earlier in its April 2008 policy statement, which are designed to boost confidence that the state‘s nuclear program is exclusively for peaceful purposes. For example, the statement indicates that the UAE will forgo ―domestic enrichment and reprocessing capabilities in favor of long-term commitments of the secure external supply of nuclear fuel.‖ Moreover, as noted above, the nuclear cooperation agreement‘s text states that the United States can end nuclear cooperation with the UAE if it acquires enrichment or reprocessing facilities. Without such capabilities, a nuclear program poses little proliferation risk. IAEA Director-General Mohamed ElBaradei explained in an August 2007 interview:

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One nuclear reactor by itself means nothing, you are still far from having an atom bomb. I am more worried when a country has a plant for industrial-scale uranium enrichment...In this case it can make a nuclear bomb within a few months. 40

As noted above, the U.S. State Department reports that the UAE‘s new nuclear regulatory law (Federal Law 6 of 2009) prohibits domestic enrichment and reprocessing.41 As a party to the nuclear Nonproliferation Treaty (NPT), any future UAE nuclear facilities would be subject to IAEA safeguards.42 Additionally, the UAE agreed to conclude an Additional Protocol to its safeguards agreement. As noted, such protocols give IAEA officials greater access to an NPT state‘s nuclear-related facilities and information. The UAE currently has a Small Quantities Protocol to its safeguards agreement, but, according to the nuclear cooperation agreement, will terminate that Protocol before the United States issues export licenses for the export of ―nuclear material, equipment, components, or technology‖ pursuant to the cooperation agreement.43 It is also worth noting that the UAE‘s 2008 policy statement on its nuclear program states that the government plans to rely on light-water reactors, which are considered among the most proliferation-resistant, partly because of the difficultly in producing and obtaining weapons-grade plutonium without detection. Moreover, a May 2008 International Institute for Strategic Studies report points out that ―no successful nuclear-weapons program has ever relied on commercial reactors.‖44 Although a civilian nuclear power program could provide cover for a country‘s procurement of dual-use items that could aid a nuclear weapons program, such a program would need to include some covert facilities.

Human Rights Concerns A video depicting the torture of an Afghan grain merchant named Muhammad Shah Poor by Abu Dhabi ruling family member Sheikh Issa bin Zayed al Nahayan and uniformed security officers has drawn widespread condemnation following its publication by ABC News in April 2009.45 In response, some Members of Congress and congressional staff have raised questions about the appropriateness of moving forward with the proposed U.S.-UAE nuclear cooperation agreement, pending UAE action on the case.46 The U.S. State Department has indicated that the Obama Administration‘s review of the proposed nuclear cooperation agreement and concerns the Administration may have about the torture depicted on the video ―are two separate issues.‖47 Abu Dhabi authorities announced on May 11, 2009, that ―the Public Prosecution Office has officially launched a criminal investigation into the events depicted on video, and detained Sheikh Issa bin Zayed Al Nahyan pending the outcome of this investigation.‖48

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Possible Diplomatic Implications Shaping Nonproliferation Standards and Best Practices The Bush Administration argued that nuclear cooperation with the UAE could set a useful precedent for mitigating the dangers of nuclear proliferation as an increasing number of countries consider developing nuclear power. The State Department stated in April 2008 that the UAE‘s choice to forgo enrichment and reprocessing ―serves as a model for the economical and responsible pursuit of nuclear power.‖ Similarly, President Obama‘s May 21 letter of transmittal argued that the agreement ―has the potential to serve as a model for other countries in the region that wish to pursue responsible nuclear energy development.‖ As noted, the proposed U.S.-UAE agreement includes a provision which apparently intends to establish the agreement‘s conditions as minimum standards for future such agreements in the Middle East. On July 8, 2009, Under Secretary of State for Arms Control and International Security Ellen Tauscher testified before the House Foreign Affairs Committee on the proposed agreement and argued that

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In addition to being indicative of our strong partnership with the UAE, the proposed Agreement is a tangible expression of the United States‘ desire to cooperate with states in the Middle East, and elsewhere, that want to develop peaceful nuclear power in a manner consistent with the highest nonproliferation, safety, and security standards... U.S. cooperation with the UAE will also serve as a distinct counterpoint to those countries that have chosen a different path, in particular Iran.49

Commercial Opportunities Licensed nuclear technology contracts with the UAE could provide commercial benefits to the U.S. nuclear industry or its international competitors. While Emirati officials have stated their strong desire for nuclear cooperation with the United States and have incorporated former U.S. government officials and U.S. contractors into their early plans and activities, the UAE also is seeking similar cooperation from other international sources. The expected value of eventual construction and management contracts is in the tens of billions of dollars. The UAE and France signed a nuclear cooperation agreement in with France in January 2008 and a similar agreement with South Korea June 22, 2009. The UAE has also signed memoranda of understanding with Japan and the United Kingdom concerning nuclear technology. UAE officials explained during a June 3, 2009, briefing that the government‘s nuclear cooperation agreement with France contains preambulary language describing the UAE‘s commitment to refrain from enrichment and reprocessing. However, the agreement does not explicitly refer to that commitment. Transferring such technologies is not within the agreement‘s scope, the officials said, adding that all future UAE nuclear cooperation agreements with other countries will reflect the government‘s policy regarding enrichment and reprocessing. Bilateral Relations and UAE Cooperation in Nonproliferation Activities As noted above, the United States and the UAE have enjoyed close and cooperative relations in recent years, in spite of periodic differences over some issues. Some observers have speculated that a failure to conclude the proposed nuclear cooperation agreement would be viewed by officials and influential figures in the UAE as an indication of a lack of faith

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The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation 109 and commitment by the United States government in the UAE, which could have negative implications for other aspects of the bilateral relationship. These fears appear to be based largely on the perceived repercussions of Dubai Ports World‘s failed 2006 bid to acquire and operate U.S. port terminals. However, others believe that while the Dubai Ports World incident undermined feelings of mutual trust and set back some planned commercial ties, the failed initiative did not otherwise damage U.S.-Emirati political or military relations in any tangible, lasting way. By all accounts, Emirati authorities appear committed to moving forward with their nuclear development plans and, while they appear to strongly desire U.S. technical assistance, it seems unlikely that their plans would be curtailed or significantly undermined if the United States declined to authorize the proposed agreement. As noted above, other international parties appear willing to provide technical assistance on a commercial basis. Some observers have argued that without U.S. involvement, the UAE program could adopt technology or systems more vulnerable to proliferation or security concerns. UAE representatives state that their commitment to forego domestic enrichment or reprocessing is fundamental and would apply under cooperative arrangements with non-U.S. suppliers.

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Legislative Developments in the 110th and 111th Congress In the 110th Congress, Representative Ros-Lehtinen introduced H.R. 7316, the ―Limitation on Nuclear Cooperation with the United Arab Emirates Act of 2008.‖ The bill would have prohibited the proposed U.S.-UAE agreement from coming into effect without presidential certification that the UAE had taken specific steps to improve its export controls and to limit the transfer of certain items to Iran. As noted above, H.R. 7316 also sought to change the procedures for the negotiation and approval of peaceful nuclear cooperation agreements by amending the Atomic Energy Act. (See ―Nuclear Cooperation Agreements, Approval Process, and Proposed Changes‖ above.) In the 111th Congress, Representative Markey introduced a joint resolution of disapproval on May 21, 2009 (H.J.Res. 55). House and Senate joint resolutions of approval were introduced on July 13, 2009 (S.J.Res. 18 and H.J.Res. 60). Representative Ros-Lehtinen is an original co-sponsor of H.J.Res. 60, although she had previously introduced two pieces of legislation to establish conditions on U.S.-UAE nuclear cooperation and to change negotiation and approval procedures for nuclear cooperation agreements: 

H.R. 364, the ―Limitation on Nuclear Cooperation with the United Arab Emirates Act of 2009‖ was introduced and referred to the House Foreign Affairs Committee on January 9, 2009. The bill states that a U.S. civil nuclear cooperation agreement with the UAE may not enter into force ―unless not less than 30 legislative days prior to such entry into force the President certifies‖ to the House Foreign Affairs Committee and the Senate Foreign Relations Committee that the UAE has improved its export control system and halted UAE-based entities‘ transfers of technology relating to Weapons of Mass Destruction programs, particularly to Iran. The bill also requires the UAE to stop the transfer of certain conventional weapons and related components to Iran. H.R. 364 also states that, if the United States and the UAE do

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Christopher M. Blanchard and Paul K. Kerr conclude a nuclear cooperation agreement, the United States may not grant an export license for ―nuclear material, equipment, or technology‖ to the UAE unless the President certifies within 30 legislative days that the UAE has met the above requirements. H.R. 547, was introduced and referred to the House Foreign Affairs Committee January 15, 2009. It contains the language from H.R. 7316 relating to procedural changes for nuclear cooperation agreements pursuant to the Atomic Energy Act.



APPENDIX. PROVISIONS IN U.S. NUCLEAR COOPERATION AGREEMENTS WITH THE UAE AND EGYPT RELEVANT TO ESTABLISHING STANDARDS FOR OTHER SUCH AGREEMENTS

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UAE The Government of the United States of America confirms that the fields of cooperation, terms and conditions accorded by the United States of America to the United Arab Emirates for cooperation in the peaceful uses of nuclear energy shall be no less favorable in scope and effect than those which may be accorded, from time to time, to any other non-nuclear-weapon State in the Middle East in a peaceful nuclear cooperation agreement. If this is, at any time, not the case, at the request of the Government of the United Arab Emirates the Government of the United States of America will provide full details of the improved terms agreed with another nonnuclear-weapon State in the Middle East, to the extent consistent with its national legislation and regulations and any relevant agreements with such other non-nuclear weapon State, and if requested by the Government of the United Arab Emirates, will consult with the Government of the United Arab Emirates regarding the possibility of amending this Agreement so that the position described above is restored.

Egypt The Government of the United States confirms that fields of cooperation, terms and conditions accorded by the United States to the Arab Republic of Egypt for cooperation in the peaceful uses of nuclear energy shall be no less favorable in scope and effect than those which may be accorded by the United States to any other non-nuclear weapon state in the Middle East in a peaceful nuclear cooperation agreement. In this connection it is understood that the safeguards required by this agreement shall be no more restrictive than those which may be required in any peaceful nuclear cooperation agreement between the United States and any other state in the region. By entering into this agreement the United States confirms its recognition of the importance of the Arab Republic of Egypt‘s adherence to the NPT, and its longstanding support of international non-proliferation measures, including establishment of a nuclear weapon free zone in the Middle East. If any situation arises which could increase the risk of proliferation of nuclear weapons, the United States and the Arab Republic of Egypt, at the request of either, shall enter into consultations with respect thereto with a view to maintaining the objectives of the NPT.

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End Notes

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1

The governments of Turkey, Egypt, Jordan, Saudi Arabia, and Algeria have announced their intent to acquire nuclear energy production capabilities; their respective programs have moved forward in recent years with varying degrees of specificity and commitment. To date, Turkey, Jordan, and Egypt appear to have made the most progress toward their stated goals of constructing and operating domestic nuclear power plants. Like the UAE, their plans do not envision operational plants before 2015. Turkey and Egypt have active peaceful nuclear cooperation agreements with the United States pursuant to Section 123 of the Atomic Energy Act (AEA) of 1954. 2 Policy of the United Arab Emirates on the Evaluation and Potential Development of Peaceful Nuclear Energy, released April 20, 2008. Available at https://pcs.enec.gov.ae/Content/Home.aspx. 3 For more detail about the proposal, see CRS Report RL34234, Managing the Nuclear Fuel Cycle: Policy Implications of Expanding Global Access to Nuclear Power, coordinated by Mary Beth Nikitin. 4 CRS meeting with Abu Dhabi Executive Authority and Emirates Nuclear Energy Corporation representatives, Abu Dhabi, December 14, 2008. Large scale petrochemicals and aluminum production projects are already underway in Abu Dhabi‘s Kalifa Industrial Zone. See Chris Stanton, ―Taweelah to host chemical city,‖ The National (Abu Dhabi), May 4, 2008; and, Chris Stanton and Ivan Gale, ―EMAL smelter remains on schedule,‖ The National (Abu Dhabi), January 13, 2009. 5 ―Policy of the United Arab Emirates on the Evaluation and Potential Development of Peaceful Nuclear Energy,‖ released April 20, 2008. Available at https://pcs.enec.gov.ae/Content/Home.aspx. 6 One economic press report suggested that the UAE may be paying as little as $1.25/million BTU of natural gas. Middle East Economic Digest, ―UAE purchases gas from Dolphin pipeline at reduced rate,‖ May 16, 2008. For more information on the pipeline, see http://www.oxy.com/Our_Businesses/oil_and_gas/Pages/ og_mena_dolphin.aspx. 7 Correspondence between CH2M Hill and U.S. Department of Energy, National Nuclear Security Administration, June 2008. 8 CRS meeting with Abu Dhabi Executive Authority and Emirates Nuclear Energy Corporation representatives, Abu Dhabi, December 14, 2008. 9 See IAEA-Technical Cooperation, National and Regional Asia and the Pacific Projects query page at http://wwwtc.iaea.org/tcweb/tcprogramme/recipients/eastasiapacific/query/default.asp. 10 Statement of Vann H. Van Diepen, Acting Assistant Secretary, State Department Bureau of International Security and Nonproliferation before the Senate Foreign Relations Subcommittee on Near Eastern and South and Central Asian Affairs, October 7, 2009. 11 CRS analyst interview with UAE official, Washington, DC, March 6, 2009. 12 UAE Minister of Foreign Affairs Shaykh Abdullah bin Zayed Al Nahyan, ―Why Go Nuclear?‖ Bulletin of the Atomic Scientists, September/October 2008; and, CRS meeting with Abu Dhabi Executive Authority and Emirates Nuclear Energy Corporation representatives, Abu Dhabi, December 14, 2008. 13 ―Policy of the United Arab Emirates.‖ The four instruments are: the Vienna Convention on Civil Liability for Nuclear Damage, the Protocol to Amend the Vienna Convention on Civil Liability, the Joint Protocol on the Application of the Vienna and Paris Conventions, and the Convention on Supplementary Compensation for Nuclear Damage. 14 See ENEC homepage at https://pcs.enec.gov.ae/Content/Home.aspx. 15 For more information on the Partnership, see CRS Report RL34234, Managing the Nuclear Fuel Cycle: Policy Implications of Expanding Global Access to Nuclear Power, coordinated by Mary Beth Nikitin. 16 Uranium enrichment and reprocessing spent nuclear fuel are the dual-use nuclear activities of greatest proliferation concern. Uranium enrichment can produce low-enriched uranium for nuclear reactor fuel or highly enriched uranium, which can be used as fissile material in nuclear weapons. Reprocessing spent nuclear fuel separates plutonium from that fuel. Plutonium can also be used as fissile material in nuclear weapons. 17 According to the agreement text, ―special fissionable material means (1) plutonium, uranium 233, or uranium enriched in the isotope 235, or (2) any other material so designated by agreement of the Parties.‖ A similar provision is contained in a 1981 U.S. nuclear cooperation agreement with Egypt. 18 CRS Analyst interview with State Department official March 9, 2009. 19 U.S. agreements with Finland and Sweden also granted such consent rights, but those agreements have been replaced by the 1996 U.S.-EURATOM agreement. 20 Japan and Switzerland have received advance consent to take back recovered plutonium for use in their civil nuclear programs. 21 CRS Analyst interviews with State Department official March 12, 2009 and former State Department official Fred McGoldrick March 10, 2009. 22 Significant nuclear cooperation includes the transfer of U.S.-origin special nuclear material subject to licensing for commercial, medical, and industrial purposes. The term ―special nuclear material,‖ as well as other terms used in the statute, is defined in 42 U.S.C. §2014. ―Special nuclear material‖ means (1) plutonium, uranium

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enriched in the isotopes 233 or 235, and any other material that is determined to be special nuclear material, but does not include source material, or (2) any material artificially enriched by any of the foregoing, but does not include source material. 23 For a primer on such agreements, which are frequently referred to as ―123 agreements,‖ see CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth Nikitin. 24 Presidential Determination No. 2009–7, November 14, 2008. 25 When calculating periods of ―continuous session‖ under the AEA, every calendar day is counted, including Saturdays and Sundays. Only days on which either chamber has adjourned for more than three days pursuant to the adoption of a concurrent resolution authorizing the adjournment do not count toward the total. If Congress adjourns its final session sine die, continuity of session is broken, and the count must start anew when it reconvenes. 26 The AEA allows the President to exempt a proposed nuclear cooperation agreement from the nonproliferation criteria specified in Section 123. Such agreements have different procedures for Congressional review. Since the proposed agreement with the UAE is apparently a non-exempt agreement, those procedures are not discussed here. 27 For additional details on these proposals, see CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth Nikitin. 28 ―UAE, USA Complete Negotiations on Peaceful Nuclear Energy Agreement,‖ Emirates News Agency, December 15, 2008; and, Mark Hibbs, ―US-UAE Cooperation Pact Initialed; Approval Left to Obama, New Congress,‖ Nucleonics Week, November 20, 2008. 29 See, for example, a November 24, 2008, statement from Representative Brad Sherman, a January 15, 2009, letter from Representative Edward Markey, and an April 6, 2009, letter from Markey, Sherman, and Representative Ileana Ros-Lehtinen. 30 ―Cabinet Approves UAE-U.S. Agreement on Peaceful Nuclear Cooperation,‖ Emirates News Agency, October 26, 2009. 31 In connection with revelations of illicit sales of nuclear technology to Iran, Libya, and North Korea by Pakistan‘s nuclear scientist A.Q. Khan, Dubai was named as a key transfer point for Khan‘s shipments of nuclear components. For more detail, see CRS Report RL32745, Pakistan's Nuclear Proliferation Activities and the Recommendations of the 9/11 Commission: U.S. Policy Constraints and Options. 32 ―Fact Sheet: Major U.S. Export Enforcement Prosecutions During Past Two Years,‖ U.S. Department of Justice, October 28, 2008. 33 Previously, all worldwide offices of Bank Melli had been designated, but they were not named specifically. 34 ―Country Group C: Destinations of Diversion Control,‖ Advanced Notice of Proposed Rulemaking, 72 Federal Register 8315, February 26, 2007. 35 Inside U.S. Trade, ―UAE Drafts New Export Control Law With U.S. Help,‖ Vol. 25, No. 11, March 16, 2007. 36 Mahmoud Habboush, ―Arms export control committee meets,‖ The National (Abu Dhabi), May 10, 2009. 37 Letter from UAE Ambassador to the United States Yousef Al Otaiba to U.S. Secretary of Commerce Carlos Guitierrez, September 17, 2008. 38 Brendan Nicholson, ―Australian Ship in Arms Row,‖ The Age, August 31, 2009; Rod Mcguirk, ―Australia Probes North Korean Weapons Shipment,‖ The Associated Press, August 30, 2009. For additional information on the Security Council resolution, see CRS Report R40684, North Korea’s Second Nuclear Test: Implications of U.N. Security Council Resolution 1874, coordinated by Mary Beth Nikitin and Mark E. Manyin. 39 ―Iran List - WMD End-Use Control: Licence Applications for Iran,‖ updated August 28, 2009. Available at http://www.berr.gov.uk/whatwedo/europeandtrade/strategic-export-control/licensing-policy/end-use-control/ page29307.html. 40 ―We‘re approaching the brink: PROFIL Interview with Mohamed El Baradei.‖ Profil, August 8, 2007. Available at http://www.iaea.org/NewsCenter/Transcripts/2007/PROFIL3507.html. 41 Statement of Vann H. Van Diepen, Acting Assistant Secretary, State Department Bureau of International Security and Nonproliferation before the Senate Foreign Relations Subcommittee on Near Eastern and South and Central Asian Affairs, October 7, 2009. 42 For more information about IAEA safeguards, see CRS Report RL33865, Arms Control and Nonproliferation: A Catalog of Treaties and Agreements, by Amy F. Woolf, Mary Beth Nikitin, and Paul K. Kerr. The UAE has had an IAEA safeguards agreement in force since 2003. The text is available at http://www.iaea.org/Publications/Documents/ Infcircs/2003/infcirc622.pdf. 43 Some NPT state-parties with small quantities of fissionable materials have concluded a Small Quantities Protocol to their IAEA safeguards agreements. Certain IAEA verification requirements are suspended for such states. 44 International Institute for Strategic Studies, Nuclear Programmes in the Middle East: In the Shadow of Iran, May 2008. 45 Vic Walter, Rehab El-Buri, Angela Hill, and Brian Ross, ―Torture Tape Implicates UAE Royal Sheikh,‖ ABC News: Nightline, April 22, 2009. Available at http://abcnews.go.com/Blotter/Story?id=7402099&page=1. 46 For example, Congressman James McGovern, the co-chairman of the House Human Rights Commission has asked, ―How can we move forward with such a delicate agreement in the face of such an atrocious human

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rights violation?‖ adding, ―If it [the proposed 123 agreement] were brought to Congress now I would certainly ask that it be rejected.‖ Robert F. Worth, ―Abu Dhabi Torture Video Raises Doubts in U.S. About Nuclear Pact,‖ New York Times, May 2, 2009. 47 Robert Wood, Acting State Department Spokesman, Daily Press Briefing, Washington, DC, April 30, 2009. 48 Emirates News Agency (WAM), ―Video matter referred to the Abu Dhabi Public Prosecution Office,‖ May 11, 2009. 49 Testimony of Under Secretary Ellen Tauscher Before the House Foreign Affairs Committee, July 8, 2009.

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In: Nuclear Ambitions and Issues in the Middle East Editor: Nathan E. Cohen

ISBN: 978-1-61668-353-5 © 2010 Nova Science Publishers, Inc.

Chapter 6

U.S. NUCLEAR COOPERATION WITH INDIA: ISSUES FOR CONGRESS 

Paul K. Kerr

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SUMMARY India, which has not signed the Nuclear Nonproliferation Treaty (NPT) and does not have International Atomic Energy Agency safeguards on all nuclear material in peaceful nuclear activities, exploded a ―peaceful‖ nuclear device in 1974, convincing the world of the need for greater restrictions on nuclear trade. The United States created the Nuclear Suppliers Group (NSG) as a direct response to India‘s test, halted nuclear exports to India a few years later, and worked to convince other states to do the same. India tested nuclear weapons again in 1998. However, President Bush announced July 18, 2005, he would ―work to achieve full civil nuclear energy cooperation with India‖ and would ―also seek agreement from Congress to adjust U.S. laws and policies,‖ in the context of a broader, global partnership with India. U.S. nuclear cooperation is governed by the Atomic Energy Act (AEA). P.L. 109-401, which President Bush signed into law on December 18, 2006, provides waivers of several provisions of the AEA (Sections 123 a. (2), 128, and 129). It requires that several steps occur before nuclear cooperation can proceed. On September 10, 2008, President Bush submitted to Congress a written determination that these requirements had been met. That same day, the President submitted the text of the proposed agreement, which had not yet been signed. The President also submitted a written determination (also required by the AEA) ―that the performance of the proposed agreement will promote and will not constitute an unreasonable risk to, the common defense and security.‖ In addition, President Bush submitted several documents, including classified and unclassified versions of a Nuclear Proliferation Assessment Statement, which is required by section 123 of the AEA. The Department of State also submitted a report required by P.L. 109- 401 on various aspects of the agreement. 

This is an edited, reformatted and augmented version of a CRS Report for Congress publication dated November 2009.

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On September 27, 2008, the House passed H.R. 7081, which approved the agreement. The Senate Committee on Foreign Relations approved identical legislation, S. 3548, September 23. The Senate passed H.R. 7081 October 1. President Bush signed P.L. 110-369 into law October 8. Secretary of State Condoleezza Rice and India‘s External Affairs Minister Shri Pranab Mukherjee signed the agreement October 10, and it entered into force December 6, 2008. However, several steps remain before U.S. companies can start nuclear trade with India. For example, P.L. 110-369 requires that, before the Nuclear Regulatory Commission can issue licenses for U.S. nuclear exports to India, the President must determine and certify to Congress that New Delhi‘s IAEA safeguards agreement has entered into force and that India‘s declaration of its nuclear facilities to the agency ―is not materially inconsistent with the facilities and schedule‖ described in a separation plan that New Delhi provided to Washington. India‘s safeguards agreement entered into force in May 2009, and New Delhi has filed the declaration with the IAEA. The President, however, has not submitted the required certifications to Congress. Furthermore, U.S. firms will likely be very reluctant to engage in nuclear trade with India if the government does not become party to the Convention on Supplementary Compensation for Nuclear Damage, which has not yet entered into force. India also is reportedly insisting that New Delhi and Washington conclude an agreement on a reprocessing facility in India before New Delhi signs contracts with U.S. nuclear firms. This report will be updated as necessary.

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RECENT DEVELOPMENTS India and the United States announced July 27, 2007, that they had reached agreement on the text of a nuclear cooperation agreement.1 P.L. 109-401, the Henry J. Hyde United StatesIndia Peaceful Atomic Energy Cooperation Act of 2006, which President Bush signed into law December 18, 2006, allows the President to waive such an agreement with India from several requirements of the Atomic Energy Act (AEA) of 1954, as amended. President Bush submitted the text of the proposed agreement to Congress September 10, 2008. Additionally, the President submitted a written determination (also required by the AEA) ―that the performance of the proposed agreement will promote and will not constitute an unreasonable risk to, the common defense and security.‖ In addition, President Bush submitted several documents, including classified and unclassified versions of a Nuclear Proliferation Assessment Statement (NPAS), which is required by section 123 of the AEA. The Department of State also submitted a report, which is required by section 104 of P.L. 109-401, on various aspects of the agreement.2 President Bush also determined that P.L. 109-401‘s requirements for the President to exercise his waiver authority have been met. These requirements are (1) provision of a credible separation plan for India‘s nuclear facilities; (2) approval by the IAEA Board of Governors of India‘s new nuclear safeguards agreement; (3) substantial progress toward concluding an Additional Protocol; (4) India‘s active support for the conclusion of a treaty to ban fissile material production for nuclear weapons; (5) India‘s support for U.S. and international efforts to halt the spread of sensitive nuclear fuel cycle technologies (enrichment

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.

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and reprocessing); (6) India taking necessary steps to secure nuclear and other sensitive materials and technologies through adherence to multilateral control regimes (like the NSG and the Missile Technology Control Regime [MTCR]); and (7) a consensus decision by the NSG to make an exception for India. President Bush submitted the agreement after the IAEA Board of Governors approved India‘s safeguards agreement August 1, 2008. The NSG decided at the end of a September 46 Extraordinary Plenary meeting to exempt India from the Group‘s export guidelines. Procedures for congressional approval of the nuclear cooperation agreement are described in both P.L. 109-401 and the AEA. According to P.L. 109-401, the agreement cannot enter into force without a joint resolution of approval from Congress. According to Section 123 b. of the AEA, the President is to submit the text of the agreement to the Senate Foreign Relations Committee and the House Committee on Foreign Affairs. The President is then to consult with the committees ―for a period of not less than thirty days of continuous session.‖ According to Section 123 d., the two committees shall, after that time, ―each hold hearings on the proposed agreement for cooperation and submit a report to their respective bodies recommending whether it should be approved or disapproved.‖ Therefore, the minimum amount of time that must elapse before Congress can vote on a joint resolution of approval is 30 days of continuous session, in addition to the amount of time Congress would take to hold hearings. On September 27, 2008, however, by a vote of 298-117 (1 Present), the House passed H.R. 7081, which approved the agreement and waived ―the provisions for congressional consideration and approval of a proposed agreement‖ contained in Sections 123 b. and 123 d. of the AEA. The Senate Foreign Relations Committee approved identical legislation, S. 3548, September 23. The Senate passed H.R. 7081 by a vote of 86-13 October 1. On October 8, President Bush signed P.L. 110-369, the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, into law. The President‘s signing statement did not indicate any differences with the legislation. According to its text, the July 2007 agreement ―shall enter into force on the date on which the Parties exchange diplomatic notes informing each other that they have completed all applicable requirements for its entry into force.‖ Secretary of State Condoleezza Rice and India‘s External Affairs Minister Shri Pranab Mukherjee signed the agreement October 10. On October 20, President Bush transmitted two certifications required by P.L. 110-369 in order for the two governments to exchange diplomatic notes. Washington and New Delhi exchanged diplomatic notes and the agreement entered into force December 6, 2008. New Delhi announced October 16, 2009, the specific sites that it has designated for U.S.supplied reactors. However, several steps remain before U.S. companies begin nuclear trade with India. For example, P.L. 110-369 requires that, before the Nuclear Regulatory Commission can issue licenses for U.S. nuclear exports to India, the President must determine and certify to Congress that New Delhi‘s IAEA safeguards agreement has entered into force and that India‘s declaration of its nuclear facilities to the agency ―is not materially inconsistent with the facilities and schedule‖ described in a separation plan that New Delhi has provided to Washington. India signed its safeguards agreement February 2, 2009, and it entered into force May 11, 2009. New Delhi filed the declaration with the IAEA in October. Furthermore, U.S. firms will likely be very reluctant to engage in nuclear trade with India if the government does not become party to the Convention on Supplementary Compensation for Nuclear Damage, which has not yet entered into force. India also is reportedly insisting

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that New Delhi and Washington conclude an agreement on a reprocessing facility in India before New Delhi signs contracts with U.S. nuclear firms. Discussions on such an agreement began in July 2009.

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BACKGROUND The United States actively promoted nuclear energy cooperation with India from the mid1950s, building nuclear power reactors (Tarapur), providing heavy water for the CIRUS research reactor, and allowing Indian scientists to study at U.S. nuclear laboratories. Although India was active in negotiations of the 1968 Nuclear Nonproliferation Treaty (NPT), India refused to join the treaty, arguing that it was discriminatory. India conducted a ―peaceful‖ nuclear test in 1974, which reinforced the notion that nuclear technology transferred for peaceful purposes could be used to produce nuclear weapons.3 Congress responded to that test by passing the Nuclear Non- Proliferation Act of 1978 (NNPA, P.L. 95-242), which imposed tough new requirements for U.S. nuclear exports to non-nuclear-weapon states—full-scope safeguards and termination of exports if such a state detonates a nuclear explosive device or engages in activities related to acquiring or manufacturing nuclear weapons, among other things.4 The United States created the NSG, a voluntary nuclear export regime, in 1975. The NSG published guidelines in 1978 ―to apply to nuclear transfers for peaceful purposes to help ensure that such transfers would not be diverted to unsafeguarded nuclear fuel cycle or nuclear explosive activities.‖5 The condition that non-nuclear-weapon states wishing to obtain U.S. nuclear exports must have full-scope safeguards created a problem for U.S. fuel supplies to India‘s reactors at Tarapur, which were built by U.S. firms and fueled by U.S. low-enriched uranium, pursuant to a 1963 nuclear cooperation agreement. After passage of the NNPA, the Carter Administration exported two more uranium shipments under executive order after the Nuclear Regulatory Commission (NRC) refused to approve an export license on nonproliferation conditions. Although the House voted to disapprove the President‘s determination, the Senate voted 46-48 on a resolution of disapproval. After 1980, all nuclear exports from the United States to India were cut off under the terms of the NNPA. France supplied fuel under the terms of the U.S. agreement with India until France also adopted a full-scope safeguards requirement in 1995. After the NSG adopted the full-scope safeguards condition in 1992, China supplied the reactor. Russia supplied fuel from 2001 to 2004.6 Although the NPT requires safeguards on items going to non-nuclear-weapon states, it does not explicitly prohibit nuclear commerce with states outside the NPT. In 1995, at the NPT Extension Conference, states supported the principle that non-NPT parties should not be eligible for the same kinds of assistance as NPT parties in good standing. India tested several nuclear weapons in 1998.

GLOBAL PARTNERSHIP7 The Bush Administration had been considering a strategic partnership with India as early as 2001. Indian officials identified their growing energy needs as an area for cooperation,

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particularly in nuclear energy. The U.S.-India 2004 Next Steps in Strategic Partnership (NSSP) initiative included expanded cooperation in civil nuclear technology as one of three goals. Phase I of the NSSP, completed in September 2004, required addressing proliferation concerns and ensuring compliance with U.S. export controls.8 On July 18, 2005, President Bush announced the creation of a global partnership with India in a joint statement with Prime Minister Manmohan Singh.9 Noting the ―significance of civilian nuclear energy for meeting growing global energy demands in a cleaner and more efficient manner,‖ President Bush said he would ―work to achieve full civil nuclear energy cooperation with India‖ and would ―also seek agreement from Congress to adjust U.S. laws and policies.‖ The Joint Statement noted that the United States will work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India, including but not limited to expeditious consideration of fuel supplies for safeguarded nuclear reactors at Tarapur.

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The United States committed to encouraging its partners to consider this request—a reversal in the U.S. position, which has been to ban fuel to Tarapur—and to consulting with its partners on Indian participation in ITER (collaboration on fusion research) and in the Generation IV International Forum for future reactor design. Prime Minister Singh conveyed that India ―would take on the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States.‖10 India agreed to:        

identify and separate its civilian and military nuclear facilities and programs; declare its civilian facilities to the IAEA; voluntarily place civilian facilities under IAEA safeguards; sign an Additional Protocol for civilian facilities; continue its unilateral nuclear test moratorium; work with the United States to conclude a Fissile Material Cut Off Treaty (FMCT);11 refrain from transferring enrichment and reprocessing technologies to states that do not have them, as well as support international efforts to limit their spread; secure its nuclear materials and technology through comprehensive export control legislation and through harmonization and adherence to MTCR and NSG guidelines.

ISSUES FOR CONSIDERATION The AEA requires Congressional approval and oversight of peaceful nuclear cooperation agreements (details described below). As Senator Lugar has noted, ―Ultimately the entire Congress ... must determine what effect the Joint Statement will have on U.S. efforts to halt the proliferation of weapons of mass destruction.‖12 Congress held eight hearings in 2005 and 2006 on the global partnership and has consulted with the Administration on various aspects of the U.S.-India nuclear agreement.13 The discussion of potential issues for consideration is drawn in part from the hearings and from the emerging debate.

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Strategy vs. Tactics The Bush Administration has described its ―desire to transform relations with India‖ as ―founded upon a strategic vision that transcends even today‘s most pressing security concerns.‖14 There is clearly broad support for cultivating a close relationship with India, yet some members of Congress have suggested that civil nuclear cooperation may not be the most appropriate vehicle for advancing our relationship. In a House International Relations Committee hearing on September 8, 2005, Congressman Jim Leach stated,

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I don‘t know any member of Congress that doesn‘t want to have a warming of relations with the government of India.... I also don‘t know many members of Congress who are pushing for the precise commitment that the administration has made.15

Congressman Leach suggested instead that U.S. support for a permanent seat for India on the United Nations Security Council might have been a more appropriate gesture. Other observers outside of Congress have questioned whether U.S. energy assistance should focus on expanding nuclear power, in contrast to other energy alternatives. Henry Sokolski of the Nonproliferation Policy Education Center has argued that Indian energy needs might be better met through free market allocation, including improved efficiency. He asserts that nuclear power is the least leveraged of India‘s options to meet India‘s energy needs, given that it currently provides only 2.7% of installed electrical capacity.16 India‘s projections of its nuclear energy needs are predicated on an estimated annual growth rate of 8%, which some observers believe may be unrealistic.17 One well-known Indian commentator, Brahma Chellaney, argued in the International Herald Tribune that the premise that India should meet its rapidly expanding energy needs through importing nuclear power reactors was flawed. Chellaney argued that a better approach for India would be to secure clean-coal and renewable energy technologies.18 The Senate Foreign Relations Committee‘s November 2, 2005, hearing sought, among other things, to answer the question of why civil nuclear cooperation was so important to the U.S.- Indian strategic relationship. Under Secretary of State Nicholas Burns told Committee members that ―India had made this the central issue in the new partnership developing between our countries.‖19

Impact on U.S. Nonproliferation Policies The Administration has characterized civil nuclear cooperation with India as a ―win‖ for nonproliferation because it would bring India into the ―nonproliferation mainstream.‖ In short, the Administration is proposing that India should be courted as an ally in U.S. nonproliferation policy, rather than continue as a target of U.S. nonproliferation policy. According to this reasoning, India should become an ally for three reasons: past policies have not worked; India has a relatively good nonproliferation record; and India could be a useful ally in the nonproliferation regime. Some observers, however, are concerned that India may not support U.S. nonproliferation policies sufficiently to warrant nuclear cooperation, particularly where the United States faces its greatest nuclear proliferation threat: Iran. For example, at the September 8 House

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International Relations Committee hearing, several members of Congress questioned whether the United States had obtained assurances from India of its support on Iran before it issued the July 18 joint statement.

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Iran Two factors may present challenges to Indian support for U.S. policies toward Iran. First, India has a growing strategic relationship with Iran, not limited to its interest in a proposed $7.4 billion, 2800-km-long gas pipeline between Iran, Pakistan, and India. Second, India has a strong tradition of foreign policy independence, as a long-time leader of the Non-Aligned Movement (NAM) states and as a vigorous opponent of the discriminatory nature of the Nuclear Nonproliferation Treaty.20 One witness before the House International Relations Committee hearing on November 16, 2005, suggested that opposition from the United States on the gas pipeline project is considered to be ―interference with India‘s autonomy in foreign relations, as well as disregard for its security and energy needs.‖21 On Iran‘s nuclear program, Indian officials have stated they do not support a nuclear weapons option for Tehran. However, they did not agree with the United States on the urgency of reporting Iran‘s nuclear program to the U.N. Security Council, which the United States has proposed since 2003, nor on the need to limit Iran‘s nuclear fuel cycle development. When the IAEA Board of Governors passed a resolution (GOV/2005/77) on September 24, 2005, finding Iran in noncompliance with its safeguards agreement, India voted with the United States, provoking significant domestic dissent. According to Indian Foreign Secretary Shyam Saran, India voted for the resolution and against the majority of NAM states which abstained, because it felt obligated after having pressured the EU-3 to omit reference to immediate referral to the U.N. Security Council.22 Moreover, India explained its vote this way: In our Explanation of Vote, we have clearly expressed our opposition to Iran being declared as noncompliant with its safeguards agreements. Nor do we agree that the current situation could constitute a threat to international peace and security. Nevertheless, the resolution does not refer the matter to the Security Council and has agreed that outstanding issues be dealt with under the aegis of the IAEA itself. This is in line with our position and therefore, we have extended our support.23

On February 4, 2006, following Iran‘s resumption of some uranium enrichment research and development, the IAEA Board of Governors met in an emergency session and voted to report Iran‘s noncompliance to the U.N. Security Council.24 India voted with the United States to report Iran, although this followed a controversial remark to the press the previous week by Ambassador David Mulford that India would have to support the United States on Iran in Vienna or the U.S. Congress would not support the peaceful nuclear cooperation agreement.25 Iran may also test India‘s support for curtailing peaceful nuclear programs. India has always been an advocate of states‘ rights to develop the peaceful uses of nuclear energy and for 30 years has derided the NPT and nonproliferation policies as discriminatory. The official Iranian press agency reported Prime Minister Singh as telling President Ahmadinejad on September 22, 2005, that solutions to Iran‘s nuclear problem should be based on the principle that Iran as an NPT member should retain its lawful rights.26 On September 26, 2005, Foreign

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Secretary Saran told the press that ―With respect to Iran‘s right to peaceful uses of nuclear energy, that is something which we have ourselves no reservations about.‖27 In September 2006, India joined in the 118-nation Nonaligned Movement (NAM) summit statement that expressed support for Iran‘s ―choices and decisions in the field of peaceful uses of nuclear technology and its fuel cycle policies.‖28

Reported Indian Transfers of WMD-related items to Iran29 Concerns about India‘s relationship with Iran extend, for some, to the transfer of Weapons of Mass Destruction (WMD)-related items. Entities in India and Iran appear to have engaged in very limited nuclear, chemical and missile-related transfers over the years. There are no publicly available indications of activities related to biological weapons. In the early 1990s, when Iran actively sought nuclear-related assistance and technology from many foreign sources, India appears to have played only a minor role in contrast to other states. India signed an agreement in November 1991 to provide a 10 megawatt research reactor to Tehran, but cancelled under pressure from the United States. Nonetheless, India reportedly trained Iranian nuclear scientists in the 1990s.30 More recently, India‘s Foreign Minister Jaswant Singh stated in December 2003 that India ―has and would continue to help Iran in its controversial bid to generate nuclear energy.‖31 In September 2004, the United States imposed sanctions on two Indian nuclear scientists, Dr. Y.S.R. Prasad and Dr. C. Surendar, under the Iran Nonproliferation Act. Indian officials protested, stating that cooperation had taken place under the auspices of the IAEA Technical Cooperation program. Other reports suggest that the scientists, who had served as Chairman and Managing Director of the Nuclear Power Corporation of India, Ltd. (NPCIL), which runs India‘s power reactors, passed information to Iran on tritium extraction from heavy water reactors.32 Sanctions were lifted on Dr. Surendar in 2005. In the chemical area, there is one confirmed transfer of 60 tons of thionyl chloride, a chemical that can be used in the production of mustard gas, from India to Iran in March 1989.33 Other shipments in that time frame reportedly were halted under U.S. pressure. India does not appear in the CIA‘s unclassified nonproliferation report to Congress as a supplier of chemical-weaponsrelated exports to Iran since the report began publication in 1997. India signed the Chemical Weapons Convention in 1993 and deposited its instrument of ratification until 1996. However, in December 2005, the United States imposed sanctions on Sabero Organic Chemicals Gujarat Ltd and Sandhya Organic Chemicals Pvt. Ltd, pursuant to the Iran Nonproliferation Act of 2000. In July 2006, the United States imposed sanctions on Balaji Amines and Prachi Poly Products, chemical manufacturers, pursuant to the Iran and Syrian Nonproliferation Act.34 Restricting Enrichment and Reprocessing One of India‘s commitments in the July 18 statement was to refrain from transferring enrichment and reprocessing technologies to states that do not already have those technologies and to support international efforts to limit their spread. As discussed in greater detail below, the NSG is considering adopting criteria for exporting enrichment and reprocessing technology. India‘s External Affairs Minister Shri Pranab Mukherjee stated September 5, 2008, that:

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India will not be the source of proliferation of sensitive technologies, including enrichment and reprocessing transfers. We stand for the strengthening of the non-proliferation regime. We support international efforts to limit the spread of ENR equipment or technologies to states that do not have them.35

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David Albright, president of the Institute for Science and International Security (ISIS), published a report on March 10, 2006, that asserted that India had potentially exported centrifuge enrichment-related technology by virtue of tendering public offers and providing blueprints for technology to interested parties.36 ISIS followed up with a September 18, 2008, report that described Indian sales of documents related to centrifuges, as well as illicit Indian procurement of a chemical used in reprocessing.37 It is not clear whether Indian procurement practices facilitate transfer of technology, but the U.S. nuclear cooperation agreement will have no impact on those procurement practices. Although the State Department asserted in responses to questions for the record from Senator Lugar that the United States will not engage in reprocessing or enrichment technology cooperation with India,38 other NSG members may transfer such technology. The NPAS notes that India, by concluding an Additional Protocol to its IAEA safeguards agreement, ―will commit to reporting to the IAEA on exports of all NSG Trigger List items.‖

Other Priorities In his February 11, 2004, speech, President Bush outlined several counterproliferation priorities, including expanding the Proliferation Security Initiative; strengthening laws and international controls against WMD and missile proliferation (ultimately resulting in adoption of UNSCR 1540); expanding the G8 Global Partnership; and strengthening IAEA safeguards through universal adoption of the Additional Protocol. Ambassador Joseph has noted that India‘s adherence to NSG and MTCR guidelines would help ensure that WMD and missilerelated technologies would not be transferred. Although India‘s adoption of the Additional Protocol would contribute to its universalization, there are few proliferation benefits to be realized from the adoption of such a protocol in a de facto nuclear weapons state. Finally, although the United States reportedly has asked India to endorse PSI, that endorsement has not been forthcoming.

Impact on the Nonproliferation Regime India‘s status outside the nonproliferation regime raises possible concerns that the nuclear agreement could negatively affect nuclear nonproliferation efforts. Some considerations include cohesion within the NSG, effect on non-nuclear-weapon member states of the NPT, potential missed opportunities to strengthen the nuclear nonproliferation regime, and whether U.S. nuclear cooperation might in any way assist, encourage, or induce India to manufacture nuclear weapons, in possible violation of our Article I obligation under the NPT.

NSG Cohesion Cohesion within the NSG is critical to effective implementation of export controls. As noted earlier, the NSG has followed the U.S. lead on requiring full-scope safeguards as a condition of nuclear supply. During the September 8, 2005, hearing, House International

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Relations Committee Chairman Henry Hyde noted that ―Many of us are strong supporters of the NSG and would not want to see it weakened or destroyed.‖ Chairman Hyde asked whether the Administration could assure the Committee that

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no matter what else happens, that the administration will continue to abide by NSG guidelines, and if you are unable to gain consensus within the NSG for the amendments you need, you will not implement the new India policy in violation of NSG guidelines.

Ambassador Joseph told the Committee that ―we intend to take no action that would undercut the effectiveness of the NSG,‖ and further, that the Administration did not intend to change the consensus procedure or even change the NSG full-scope safeguards condition of nuclear supply.39 P.L. 109-401 states that the NSG should decide ―by consensus to permit supply to India of nuclear items covered by‖ the NSG guidelines. Dissent within the NSG could be counterproductive to achieving other objectives the United States is pursuing in nuclear nonproliferation, such as restricting the fuel cycle, disarming North Korea, and restraining Iran, all of which rely on the considerable support of friends and allies. Moreover, harmonizing export controls has played a key role in Bush counter- and nonproliferation policies in the last few years and is particularly important for interdiction efforts. U.S.-India cooperation could prompt other suppliers, like China, to justify supplying other nonnuclear-weapon states, like Pakistan. China, which joined the NSG in 2004, has reportedly favored an NSG decision based on criteria, not just an exception for India.40 Indeed, Pakistani Foreign Secretary Shah Mahmood Qureshi said that Islamabad is interested in similar nuclear cooperation with nuclear supplier states, the Press Trust of India reported July 24, 2008. A July 18, 2008, letter from Pakistan‘s Permanent Representative to the IAEA similarly reflected such an interest.41 Russia, which only halted fuel supplies to the Indian Tarapur reactors in December 2004 at the insistence of the NSG, resumed fuel supplies to Tarapur under the guise of the safety exception, reportedly to the dismay of many NSG members.42

Effect on NPT Member States India has complained for years that it has been excluded from regular nuclear commerce because of its status outside the NPT. Some observers believe this is a good thing and shows that the policy works. Others believe that a new paradigm is needed for India because it will not join the NPT as a non-nuclear-weapon state. One observer argued in a 2005 law review journal that India could join the NPT as a non-nuclear-weapon state and not give up its nuclear weapons, primarily because the NPT defines ―nuclear weapon states‖ but does not define non-nuclear-weapon states and because the treaty does not expressly prohibit nonnuclear-weapon states from possessing nuclear weapons, just from acquiring, manufacturing, receiving transfers of or control of nuclear weapons and not to seek or receive any assistance in manufacturing nuclear weapons.43 However, that approach would require India to stop producing fissile material for nuclear weapons and place all nuclear material (except that which is in its nuclear weapons) under IAEA safeguards. The NPT is basically a two-way bargain. Non-nuclear-weapon states under the NPT give up the option of developing nuclear weapons in exchange for the promise of peaceful nuclear cooperation. Nuclear weapon states under the treaty commit to eventual disarmament. India, as a state outside the NPT, is bound by neither of these commitments. Some observers may

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see the offer of nuclear cooperation previously reserved for states under the NPT with fullscope safeguards not only as undermining the agreements made by non-nuclear-weapon states, but also the commitments made by nuclear weapon states to eventually disarm. In this view, India‘s continued unilateral testing moratorium is insufficient, compared with signing the Comprehensive Test Ban Treaty (CTBT) and its support for FMCT negotiations is insufficient compared with capping its nuclear weapons fissile material production now, as four of the five nuclear weapon states formally have done. Some have suggested that the absence of an Indian cap on fissile material production for weapons may make it difficult for China to declare it has halted fissile material production for weapons. Others have suggested that, absent a cap on fissile material production, it would be difficult to ensure that peaceful nuclear cooperation was not indirectly assisting or encouraging India‘s nuclear weapons program. The proliferation shocks of the 1990s, when the Iraqi and North Korean clandestine nuclear weapons programs surfaced, led to the strengthening of the NPT and export control regimes. At the 1995 NPT Review and Extension Conference, NPT parties affirmed the NSG‘s decision to require full-scope safeguards for nuclear exports, supporting the principle that non-NPT parties should not be eligible for the same kinds of assistance as NPT parties in good standing. At the 2000 conference, NPT parties again supported that principle. According to the U.S. ambassador to the conference at that time, ―Reinforcement of this guideline is important given some who have questioned whether this principle should be relaxed for India and Pakistan, which have not accepted full-scope IAEA safeguards. The answer from NPT parties is clearly no.‖44 In the past 10 years, virtually all states agreed to strengthen the nonproliferation regime, sacrificing some sovereignty by allowing additional, intrusive inspections under the Additional Protocol. In the wake of revelations in 2004 about Pakistani scientist A.Q. Khan‘s nuclear black market sales, non-nuclear-weapon states under the NPT are also being asked to consider further restrictions on their sovereignty by voluntarily restricting their access to sensitive nuclear technologies like uranium enrichment and reprocessing. If some states view the U.S.-Indian nuclear cooperation agreement as a breach of faith in the basic bargain of the NPT, they might be less inclined to accept additional sacrifices, to the detriment of the nonproliferation regime.

Missed Opportunities Ambassador Joseph described the nuclear initiative as representing ―a substantial net gain for nonproliferation. It is a win for our strategic relationship, a win for energy security, and a win for nonproliferation.‖ Ambassador Joseph said he was ―convinced that the nonproliferation regime will emerge stronger as a result.‖45 However, some observers have suggested the United States asked for too little. For example, Fred McGoldrick, Harold Bengelsdorf, and Lawrence Scheinman argued in the October 2005 issue of Arms Control Today that It is open to serious doubt whether the proposed Indian concessions were significant enough to justify the accommodations promised by the United States and whether the steps the United States and India agreed to take in the civil nuclear area will, on balance, be supportive of global nonproliferation efforts... If the Bush Administration is able to implement the joint declaration without significant modification, it will have given the Indians a great

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Paul K. Kerr deal— acknowledgment as a de facto nuclear weapon state and access to the international nuclear energy market—in return for largely symbolic concessions in the nonproliferation area.46

Robert Einhorn of the Center for Strategic and International Studies told members of the House International Relations Committee on October 26, 2005, that several of the steps pledged by India are ―simply reaffirmations of existing positions.‖47 The Indian embassy itself has downplayed the depth and breadth of its nonproliferation commitments, describing all but its safeguards commitments under the July 2005 statement in the following way:

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A number of existing policies were also reiterated by India, among them a unilateral moratorium on nuclear testing, working towards conclusion of a multilateral Fissile Material Cut-off Treaty, non-transfer of enrichment and reprocessing technologies, securing nuclear materials and technology through export control, and harmonisation with MTCR and NSG guidelines.48

India has had a self-imposed nuclear test moratorium for years, although supporters of this agreement note that this agreement would bind India bilaterally to honoring that pledge. If the NSG used a similar criterion in approving exports, it could further strengthen that pledge. India has supported FMCT negotiations for years, despite continuing to produce fissile material for use in nuclear weapons. Since the pace of FMCT negotiations has been glacial, support for negotiations could allow India to continue producing fissile material indefinitely. Moreover, the draft treaty on FMCT tabled by the United States in Geneva on May 18, 2006, would not require India‘s accession for the treaty to enter into force, thus lessening the pressure on India to join. Prime Minister Singh told his Parliament on August 17, 2006, that ―India is willing to join only a non discriminatory, multilaterally negotiated and internationally verifiable FMCT.‖49 Unfortunately, this conflicts with the U.S. draft proposal, which contains no verification measures. The most far-reaching of the commitments is to separate civilian and military facilities, declare civilian facilities, and place them under safeguards. Administration officials have pointed to this aspect of the agreement as a nonproliferation ―plus.‖ Yet, allowing India broad latitude in determining which of its facilities to put under international safeguards is a privilege accorded currently only to nuclear weapon states under the NPT. Although the United States ―in no way recognizes India as an NPT nuclear weapons state,‖ excluding military facilities from inspections is a tacit recognition of their legitimacy. IAEA Director General Dr. Mohamed ElBaradei said that he has ―always advocated concrete and practical steps towards the universal application of IAEA safeguards.‖50 In remarks to the Carnegie Endowment‘s Nonproliferation Conference in November 2005, Dr. ElBaradei cited additional safety benefits of putting more Indian facilities under safeguards. However, it should be noted that the NSG already has an exception to its full-scope safeguards requirement for safety-related items. The Administration has asserted that India has an ―exceptional‖ record of nonproliferation and, despite a few isolated sanctions, most of the evidence supports the view that India has exercised restraint in export controls.51 As such, however, New Delhi‘s promise to refrain from transferring enrichment and reprocessing technologies to states that do not

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have them, as well as its promise to adhere to NSG guidelines, may be little more than a formality. Many observers have noted that there are no measures in this global partnership to restrain India‘s nuclear weapons program. Many have suggested that the United States should have asked New Delhi to halt fissile material production for weapons. Ambassador Joseph stated that the United States remains ―committed to achieving Indian curtailment of fissile material production, and we have strongly encouraged a move in this direction. We stand willing to explore options that might serve this objective, but we will not insist on it for purposes of this civil nuclear initiative.‖52 Indian officials, on the other hand, have taken pains to point out that ―There is no commitment at all to cease production of fissile material ahead of the conclusion of such a multilateral [FMCT] treaty.‖53 Prime Minister Singh told the parliament in August 2006 that ―Our position on this matter is unambiguous. We are not willing to accept a moratorium on the production of fissile material.‖54 Other observers have noted that although India committed to a test ban, it did not commit to signing the CTBT. Still other observers have suggested that if India insists on being treated as a nuclear weapon state, it should undertake responsibilities similar to those of the other nuclear weapon states, for example, placing fissile material excess to defense needs under safeguards. Many believe that real limits on India‘s nuclear weapons program would constitute a ―win‖ for nonproliferation.

U.S. NPT Article I Obligations/Aiding India’s Nuclear Arsenal Article I of the NPT states that

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each nuclear-weapon State Party to the Treaty undertakes not to transfer to any recipient whatsoever nuclear weapons or other nuclear explosive devices or control over such weapons or explosive devices directly, or indirectly; and not in any way to assist, encourage, or induce any non-nuclear-weapon State to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices, or control over such weapons or explosive devices.

Given that India will continue to make nuclear weapons, but is considered under the NPT to be a non-nuclear-weapon state, the question arises as to whether U.S. assistance might in any way violate Article I.55 In testimony before the House International Relations Committee, David Albright of ISIS stated that ―Without India halting production of fissile material for its nuclear weapons programs, nuclear assistance, particularly any in the areas involving the fuel cycle, would likely spill over to India‘s nuclear weapons program.‖56 Three areas raise potential concerns: whether the separation plan is adequate to ensure that cooperation does not in any way assist in the development or production of nuclear weapons; whether cooperation confers nuclear weapons state status on India, with an unintended consequence of encouraging the Indian nuclear weapons program; and whether opening up the international uranium market frees up India‘s domestic uranium for use in its weapons program.

Separation Plan Credibility Administration officials have defended the separation plan as credible and defensible because it covers more than just a token number of Indian facilities, provides for safeguards in perpetuity, and includes upstream and downstream facilities.57 However, although IAEA safeguards ensure that nuclear material is not diverted, there are no procedures or measures in

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place to ensure that information, technology and know-how are not transferred from the civil sector to the military sector. This issue, which the September 2008 NPAS does not appear to address, could become a key loophole. For example, U.S. assistance to one of the eight indigenous power reactors, whether focused on nuclear safety, improving operational efficiency, or extending its lifetime, could easily be applied by Indian personnel to one of the similar, but unsafeguarded indigenous power reactors. Some Indian commentators have suggested that the United States has little technology to offer India, and others have doubted whether U.S. assistance would be provided to those indigenous power reactors.

Conferring Nuclear Weapon-State Status A second area that raises concerns is whether nuclear cooperation confers nuclear weapon state status on India, which could encourage its weapons program. Senator Lugar noted in a hearing on November 2, 2005, that ―Prior to the July 18 joint statement India had repeatedly sought unsuccessfully to be recognized as an official nuclear weapons state, a status the NPT reserves only for the United States, China, France, Russia and the United Kingdom. Opponents argue that granting India such status will undermine the essential bargain that is at the core of NPT, namely, that only by foregoing nuclear weapons can a country gain civilian nuclear assistance.‖ Dr. Ashton Carter, testifying at that SFRC hearing, stated that:

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India obtained de-facto recognition of its nuclear weapons status. The United States will behave, and urge others to behave, as if India were a nuclear weapons state under the NPT. We won‘t deny it most civil nuclear technology or commerce. We won‘t require it to put all of its nuclear facilities under IAEA safeguards—only those it declares to be civil. Beyond these technicalities, nuclear recognition confers an enormous political benefit on India.

Secretary Rice, in response to a question for the record in April 2006 on India‘s nuclear weapon state status, stated that ―While India has nuclear weapons and we must deal with this fact in a realistic, pragmatic manner, we do not recognize India as a nuclear weapon state or seek to legitimize India‘s nuclear weapons program.‖ However, other officials‘ statements appear to lend more support to India. Under Secretary of State Nicholas Burns told reporters on March 2, 2006, that ―India is a nuclear weapons power, and India will preserve part of its nuclear industry to service its nuclear weapons program.‖58 IAEA Director-General ElBaradei argues that the U.S.-India deal is ―neutral‖ because ―it does not confer any ‗status,‘ legal or otherwise, on India as a possessor of nuclear weapons.‖59 Nonetheless, the successful U.S. effort to create an exemption in its nuclear cooperation law for New Delhi has placed India in the company of only four other nations— the United Kingdom, France, China, and Russia—all de jure nuclear weapon states. Many observers believe that this legitimizes India‘s nuclear weapons program by providing de facto recognition. Indian official statements repeatedly have used the term ―advanced nuclear states‖ as synonymous with nuclear weapon states; Prime Minister Singh told the Parliament in August 2006 that The July Statement did not refer to India as a Nuclear Weapons State because that has a particular connotation in the NPT, but it explicitly acknowledged the existence of India‘s military nuclear facilities. It also meant that India would not attract full-scope safeguards such

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as those applied to non-nuclear weapon states that are signatories to the NPT and there would be no curbs on continuation of India‘s nuclear weapon related activities. In these important respects, India would be very much on par with the five Nuclear Weapon States who are signatories to the NPT. Similarly, the Separation Plan provided for an India specific safeguards agreement with the IAEA with assurances of uninterrupted supply of fuel to reactors together with India‘s right to take corrective measures in the event fuel supplies are interrupted. We have made clear to the US that India‘s strategic programme is totally outside the purview of the July Statement, and we oppose any legislative provisions that mandate scrutiny of our nuclear weapons programme or our unsafeguarded nuclear facilities.

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Offsetting India’s Uranium Shortage Finally, critics of U.S.-Indian civil nuclear cooperation have argued that giving India access to the international uranium market would free up New Delhi‘s domestic uranium resources for use in its weapons program.60 India has limited indigenous uranium reserves and apparently has difficulty producing reactor fuel from these reserves. New Delhi has reportedly reduced its power reactors‘ electricity output because of fuel shortages.61 Since the NSG‘s 1992 adoption of the full-scope safeguards condition for exports, New Delhi has not had access to the international uranium market.62 Foreign Secretary Saran pointed out on February 18, 2008, that ―a major expansion in nuclear power in the medium term‖ would require India to import ―higher capacity reactors and uranium fuel.‖63 Similarly, the NPAS states that ―India must import fuel, reactors, and other technologies ... to meet its nuclear electricity-generating targets.‖ India‘s current fuel situation means that New Delhi cannot produce sufficient fuel for both its nuclear weapons program and its projected civil nuclear program. A panel of nuclear experts concluded in 2006 that India‘s production of weapon grade plutonium is currently constrained by the competing demands of India‘s nuclear-power reactors for its limited domestic supply of natural uranium. If India could import fuel for its civilian nuclear reactors, it could use more domestic uranium for the production of weapon materials.64

Acknowledging the country‘s uranium limitations, India‘s leading nuclear strategist K. Subrahmanyam suggested December 12, 2005, in The Times of India, that New Delhi should use imported nuclear fuel to preserve its domestic uranium reserves for nuclear weapons: Given India‘s uranium ore crunch and the need to build up our minimum credible nuclear deterrent arsenal as fast as possible, it is to India‘s advantage to categorize as many power reactors as possible as civilian ones to be refueled by imported uranium and conserve our native uranium fuel for weapon-grade plutonium production.‖65

Proponents of U.S.-Indian nuclear cooperation have made several arguments regarding the Article I issue. None of these claims, however, refute the fact that India‘s access to the international uranium market will result in more indigenous Indian uranium available for weapons because it will not be consumed by New Delhi‘s newly safeguarded reactors.66 For example, proponents of the deal argue that India already has sufficient uranium to increase its nuclear arsenal and that New Delhi does not plan to increase that arsenal. The NPAS states that ―India is capable of maintaining and expanding its existing nuclear arsenal within the

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limit of its indigenous resources and capabilities.‖ Secretary Rice made a similar argument during an April 5, 2006, House International Relations Committee hearing. But these arguments do not address the constraints India faces in pursuing its civilian and military nuclear programs using only indigenous uranium. The NPAS also addresses New Delhi‘s intentions regarding its future nuclear arsenal. First, the statement says that Washington has ―no evidence indicating that India plans to use additional domestic uranium reserves in its nuclear weapons programs as a consequence of implementing‖ the nuclear cooperation agreement. Second, the NPAS argues that New Delhi has ―a posture of nuclear restraint,‖ citing India‘s stated no-first-use nuclear weapon policy and need for only a ―credible minimum deterrent.‖ India, however, has never defined what it means by such a deterrent; Saran stated during an April 2006 television interview that ―there is no responsibility on part of India to declare what its minimum deterrent is.‖67 Moreover, New Delhi‘s intentions are irrelevant to determining U.S. compliance with its Article I obligations. Furthermore, the NPAS appears to argue that the agreement may reduce India‘s potential to produce additional fissile material for weapons, because the additional indigenous Indian reactors placed under safeguards ―will no longer be available for this purpose.‖ However, the statement characterizes the reactors‘ potential to produce fissile material for weapons as ―theoretical.‖ And, as noted above, India is not obligated to place future reactors under safeguards. The State Department report submitted with the agreement notes that IAEA safeguards will prevent India from using its civil nuclear facilities for its nuclear weapons program. It also describes the ways in which U.S. export control policies prevent exported U.S. dual-use nuclear technologies from being used for military purposes.68 In the view of many nonproliferation analysts, the key to ensuring that civilian nuclear cooperation does not assist India‘s weapons program is to insist on New Delhi halting its fissile material production for weapons. That would narrow the area of concern to technology transfer to the weapons and delivery systems themselves, rather than fissile material production in reactors, enrichment facilities, and reprocessing plants. Among others, Henry Sokolski suggested in the Wall Street Journal that ―If we want to keep this aid from freeing up India‘s domestic nuclear resources to make more bombs ... we have to get serious about India capping its nuclear weapons program.‖

STEPS REQUIRED BY P.L. 109-401 As noted above, P.L. 109-401 allows the President to exempt a U.S. nuclear cooperation agreement with India from several AEA requirements. Before such an agreement can enter into force, however, the President must first certify that several steps have been completed. President Bush did so September 10. After the President signs H.R. 7081, which both the House and Senate have passed, Washington and New Delhi must, according to the agreement‘s text, ―exchange diplomatic notes informing each other that they have completed all applicable requirements‖ in order for the agreement to enter into force.

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Separation Plan and Safeguards69 U.S. and Indian officials agreed on India‘s separation plan in March 2006. The key elements of that plan are:70 

  

8 indigenous Indian power reactors will be placed under an India-specific safeguards agreement, bringing the total number of power reactors under safeguards to 14 of 22 (6 are already under safeguards)71 Future power reactors may also be placed under safeguards, if India declares them as civilian Some facilities in the Nuclear Fuel Complex (e.g., fuel fabrication) will be specified as civilian in 2008 9 research facilities and 3 heavy water plants would be declared as civilian, but are ―safeguards-irrelevant.‖

The following facilities and activities were not on the separation list:    

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  

8 indigenous Indian power reactors Fast Breeder test Reactor (FTBR) and Prototype Fast Breeder Reactors (PFBR) under construction Enrichment facilities Spent fuel reprocessing facilities (except for the existing safeguards on the Power Reactor Fuel Reprocessing (PREFRE) plant) Research reactors: CIRUS (which will be shut down in 2010), Dhruva, Advanced Heavy Water Reactor 3 heavy water plants Various military-related plants (e.g., prototype naval reactor).

The separation plan stated that India would begin placing facilities under safeguards in 2006 and complete the process in 2014. However, since the IAEA did not approve New Delhi‘s safeguards agreement until 2008, India will need to update that timeline. Acting Deputy Assistant Secretary of State for International Security And Nonproliferation Richard Stratford told the Senate Foreign Relations Committee September 18, that New Delhi stands by its initial plan to bring its facilities under safeguards by 2014. India‘s Implementation Document noted that facilities were excluded from the civilian list if they were located in a larger hub of strategic significance, even if the facilities themselves were not normally engaged in activities of strategic significance, calling into question whether the plan really will result in a ―separation‖ of civilian and military facilities. Moreover, the plan stated that electricity grid connectivity is not relevant to the separation exercise and that grid connectivity would be necessary ―irrespective of whether the reactor concerned is civilian or not civilian.‖ This means that ―military‖ reactors will continue to provide civilian electricity. Another question that arises is whether India, in the absence of full-scope safeguards, can provide sufficient confidence that U.S. peaceful nuclear technology will not be diverted to nuclear weapons purposes, as many believe it was in 1974.72 In response to a question for the

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record submitted by Senator Lugar on April 5, 2006, on whether exports of nuclear material or reactors from the United States would in any way assist India‘s nuclear weapons program, the Administration noted that ―Any items sent to India would be subject to safeguards, and implementation of the Additional Protocol would provide further assurances of the nondiversion of such items or material.‖73 However, the Additional Protocol provides assurances of absence of undeclared activities, rather than of the non-diversion of safeguarded items, contrary to Secretary Rice‘s assertions. Administration officials repeatedly have stressed that India‘s separation plan must be credible, transparent, and defensible from a nonproliferation standpoint,74 and that ―the resultant safeguards must contribute to our nonproliferation goals.‖75 To those observers who interpreted that statement to mean that a separation plan would need to take into account India‘s past commitments (e.g., use of purportedly ―peaceful‖ nuclear reactors like CIRUS to produce plutonium for nuclear weapons) and the impact on its nuclear weapons program (e.g., capping India‘s fissile material production), the separation plan may not appear credible. To those observers who interpreted ―credible‖ to mean that all power reactors that supplied electricity would be declared civilian because they have a civilian use, the separation plan also may not appear credible. Secretary Rice has stressed, however, that more reactors under safeguards means more transparency, more physical security, better nuclear safety, and therefore increased safety for the United States.76 Even so, some observers may argue that types of facilities safeguarded are critical in assessing whether the plan is defensible from a nonproliferation standpoint. For example, in terms of preventing terrorist access to fissile material, safeguarding facilities like reprocessing and enrichment plants and breeder reactors could be viewed as providing a significant nonproliferation benefit because the materials produced by these plants are a few steps closer to potential use in a bomb. In addition, safeguards on enrichment, reprocessing plants, and breeder reactors would support the 2002 U.S. National Strategy to Combat Weapons of Mass Destruction, in which the United States pledged to ―continue to discourage the worldwide accumulation of separated plutonium and to minimize the use of highly-enriched uranium.‖77

India-IAEA Discussions/Domestic Opposition78 After the United States and India concluded the nuclear agreement last July, New Delhi delayed beginning talks with the IAEA about a safeguards agreement because of domestic opposition from Communist and other leftist parties, known as the Left Front. 79 Until recently, the United Progressive Alliance government, led by Prime Minister Singh, depended on those parties‘ support in order to stay in power. In India, the executive can enter into international agreements without parliamentary approval, but the Left Front threatened to withdraw its support if the government went ahead with the safeguards discussion. Indian officials had indicated multiple times that the government would not risk prompting early elections in order to push the deal through. In November 2007, the Left Front agreed to allow the government to engage in discussions with the IAEA. The talks were announced November 21, and the two parties subsequently met five times. New Delhi had indicated that, once a safeguards text has been agreed upon with the IAEA Secretariat, the government would seek approval from an ad hoc political committee (which includes the Communists) before proceeding further with the agreement. Speaking before a Calcutta audience February 3, 2008, External Affairs Minister Mukherjee said that when ―the draft agreement [with the IAEA] is ready it will be brought back to the United

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Progressive Alliance (UPA)-Left Coalition committee for its approval and suggestion.‖80 Similarly, Communist Party of India (Marxist) General Secretary Prakash Karat stated the previous November that ―we have come to an understanding that the government can go to the IAEA secretariat. But the outcome of the talks should be brought to the committee before moving to the IAEA board of governors.‖81 The committee last met June 25, 2008. The government, however, never presented the text of the safeguards agreement to the committee, and at New Delhi‘s request, the IAEA Secretariat circulated the draft text (GOV/2008/30)82 July 9, 2008, to the agency‘s board. Pakistan, along with several unidentified board members, had ―voiced strong reservations‖ about the safeguards agreement, according to a July 24, 2008, Nucleonics Week article,83 but the Board of Governors approved the agreement by consensus August 1, 2008. Four Left Front parties withdrew their support for the coalition government July 9, 2008, shortly after Singh announced that India would approach the IAEA board. However, the coalition government narrowly won a July 22, 2008, vote of confidence, staving off the threat of early elections. Karat stated September 7, 2008, that the Left Front would only support a government that would terminate the nuclear agreement with the United States.84 However, despite the loss of the Left Front‘s support, the coalition government considerably bolstered its standing in April- May 2009 parliamentary elections, thereby obtaining a more stable coalition. The opposition Bharatiya Janata Party has expressed its opposition to the deal and has stated that it would attempt to renegotiate it if the party regains power. 85

India’s Safeguards Agreement86 IAEA Director-General ElBaradei described India‘s safeguards agreement as an ―umbrella agreement‖ that allows for any facility identified by New Delhi in the future to become subject to safeguards. Since New Delhi has committed to place additional reactors under safeguards, Elbaradei added, concluding an umbrella agreement was more efficient than negotiating different agreements for each facility. India signed the agreement February 2, 2009, and it entered into force May 11, 2009. The safeguards agreement requires India to provide the IAEA with a declaration of its nuclear facilities ―based on [New Delhi‘s] sovereign decision to place voluntarily its civilian nuclear facilities under Agency safeguards in a phased manner.‖ India is to implement this provision in a two-step process. First, New Delhi will provide a declaration of nuclear facilities that it intends to place under safeguards in the future. On July 25, 2008, India provided to the IAEA a document— a copy of New Delhi‘s 2006 separation plan—containing a list of its nuclear facilities.87 New Delhi provided a more formal declaration of the facilities in October 2009, but it has not yet been made public.88 India is to notify the IAEA later when specific facilities are to be safeguarded. Those facilities will be placed on an Annex to the agreement. India will also have to notify the agency of imported items that are required to be safeguarded. These will not be listed in the Annex. A State Department official said that the India‘s submission of this plan does not constitute submission of the declaration required by the safeguards agreement, but does satisfy P.L. 109- 401‗s requirement regarding New Delhi‘s declaration.89 India‘s placement of nuclear facilities under safeguards appears to be contingent on its conclusion of nuclear supply agreements with other countries. Anil Kakodkar, Chairman of India‘s Atomic Energy Commission, said in a July 20, 2008, interview that India‘s

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identification of ―any facility as civilian is conditional on that facility benefitting from full civil nuclear cooperation‖ with other countries.90 Some observers have expressed concerns about the agreement‘s preamble, which contains language suggesting that India could withdraw nuclear facilities or fuel from safeguards if New Delhi so chooses. For example, the preamble states that India ―may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies.‖ New Delhi has not defined ―corrective measures,‖ although Kakodkar described them in July 2008 as ―unspecified sovereign actions.‖91 The preamble also states that [a]n essential basis of India‘s concurrence to accept Agency safeguards is ... support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India‘s reactors.

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New Delhi may want such a stockpile to hedge against a cut-off of fuel supplies in the event that, for example, India tests a nuclear weapon. However, ElBaradei stated August 1, 2008, that the agreement‘s specific termination clauses ―override any general clauses in the agreement.‖ Additionally, the State Department stated in January 2008 responses to Questions for the Record submitted by the House Committee on Foreign Affairs that New Delhi ―has expressed its view that for purposes of implementing the U.S.-India Agreement,‖ IAEA safeguards ―can and should be regarded as being ‗in perpetuity.‘‖92 It is also worth noting that, if India were to terminate IAEA safeguards on U.S. nuclear exports (or special nuclear material produced from or with such exports), section 123 a. (1) of the AEA requires that fall-back safeguards be maintained on those exports. The nuclear cooperation agreement states that safeguards will be maintained with respect to all nuclear materials and equipment transferred pursuant to this Agreement, and with respect to all special fissionable material used in or produced through the use of such nuclear materials and equipment, so long as the material or equipment remains under the jurisdiction or control of the cooperating Party.

The State Department noted that if IAEA safeguards ―fail to be applied,‖ the two countries ―must enter into arrangements for alternative measures to fulfill‖ the above requirement.93 Furthermore, also stated that ―it would not be consistent with the proposed agreement text for ... corrective measures to detract from the applicability‖ of safeguards to the relevant nuclear items ―including after termination or expiration of the agreement,‖94 according to the Department‘s January 2008 responses.

NSG Support Following formal and informal U.S. consultations with NSG members, the United States presented during a March 2006 Consultative Group meeting a draft decision for potential discussion during the NSG plenary in May 2006.95 That draft sought an exception for India to

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the NSG requirements of full-scope safeguards, notwithstanding the exceptions for safety assistance and for those agreements signed before the full-scope safeguards requirement came into effect in 1992. It did not contain any restrictions on enrichment or reprocessing cooperation, nor on heavy water or HEU or plutonium sales.96 The United States subsequently developed a second draft decision, which incorporated the suggestions of supporting NSG members.97 After revising that draft following consultations with New Delhi, Washington submitted it to the NSG chair in early August 2008.98 The second version did not contain any additional restrictions on India. Indeed, it weakened one section of the 2006 draft which stated that NSG members could engage in nuclear trade with New Delhi if ―the participating Government intending to make the transfer is satisfied that India continues to fully meet all‖ of its nonproliferation and safeguards commitments. The new draft stated only that

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Participating Governments shall maintain contact and consult through regular channels on matters connected with the implementation of the Guidelines, taking into account relevant international commitments and bilateral agreements with India.

The NSG considered the new draft decision during an August 21-22 Extraordinary Plenary meeting and decided during a similar meeting held September 4-6, 2008, to exempt India from some of its export guidelines. This decision means that members‘ decisions to export previously restricted nuclear items to India are now governed by individual governments‘ policies.99 Although several countries advocated that certain conditions (such as an explicit ban on the transfer of enrichment and reprocessing technology, as well as a provision that nuclear supplies to India would end if New Delhi were to test a nuclear weapon) be included in an exemption for India, the final language contains no such explicit conditions.100 Instead, it states that the exemption is ―based on‖ Indian commitments and actions, which are essentially the same as the requirements in P.L. 109-401. The NSG statement also notes that the India has agreed to continue its ―unilateral moratorium on nuclear testing.‖ The NSG agreed to exempt India from the portions of its guidelines that require India to have full-scope IAEA safeguards ―provided that transfers of sensitive exports [enrichment and reprocessing technology] remain subject to paragraphs 6 and 7 of the Guidelines.‖ The relevant portions of those paragraphs state that suppliers should exercise restraint in the transfer of sensitive facilities, technology and material usable for nuclear weapons or other nuclear explosive devices. If enrichment or reprocessing facilities, equipment or technology are to be transferred, suppliers should encourage recipients to accept, as an alternative to national plants, supplier involvement and/or other appropriate multinational participation in resulting facilities ... [and] For a transfer of an enrichment facility, or technology therefor, the recipient nation should agree that neither the transferred facility, nor any facility based on such technology, will be designed or operated for the production of greater than 20% enriched uranium without the consent of the supplier nation, of which the IAEA should be advised.

Ireland reportedly stated after the NSG decision that, ―on the basis of consultations during the meeting, it ‗understands that no [NSG member] currently intends to transfer to India any facilities, equipment, materials, or technology related to the enrichment of uranium, Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

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or the reprocessing of spent fuel.‘‖101 Under Secretary of State for Arms Control and International Security John Rood made a similar assertion during a September 18, 2008, Senate Foreign Relations Committee hearing. Berman explained September 26 that he chose to support H.R. 7081, the bill approving the agreement, partly because Secretary Rice ―made a personal commitment‖ to him that ―the United States will make its ‗highest priority‘ at the November meeting of the Nuclear Suppliers Group the achievement of a decision by all of the nuclear suppliers to prohibit the export of enrichment and reprocessing equipment and technology‖ to non-NPT states. Asked the same day about Berman‘s statement, Rice told Reuters that the United States would advocate for ―strict limits‖ on the export of such technology. The NSG is considering adopting criteria for exporting enrichment and reprocessing technology. President Bush stated in February 2004 that NSG members should refuse to sell ―enrichment and reprocessing equipment and technologies to any state that does not already possess full-scale, functioning enrichment and reprocessing plants.‖ The administration has since shifted its position and proposed export criteria of its own. France first introduced such criteria in 2004.102 According to the September 2008 NSG statement, participating governments will meet ―and act in accordance with paragraph 16 of the [group‘s] Guidelines‖ if one or more members ―consider that circumstances have arisen which require consultations.‖ Paragraph 16 provides a list of potential steps for NSG members to take if

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one or more suppliers believe that there has been a violation of supplier/recipient understanding resulting from these Guidelines, particularly in the case of an explosion of a nuclear device, or illegal termination or violation of IAEA safeguards by a recipient.

Under such circumstances, NSG members could agree to cut off nuclear supplies; indeed, New Zealand stated September 6 that ―in the event of a nuclear test by India, this exemption will become null and void.‖ However, the NSG would have to agree by consensus to cut off nuclear exports. Several NSG governments indicated in statements after the vote that a September 5, 2008, statement from Mukherjee describing India‘s ―stand on disarmament and nonproliferation‖ played a decisive role in persuading them to agree to the exemption.103 However, Mukherjee simply reiterated previous Indian policies and articulated no new commitments. For example, he stated that India ―remain[s] committed to a voluntary, unilateral moratorium on nuclear testing,‖ but New Delhi is already committed to such a moratorium. Furthermore, Congress party spokesperson Manis Tiwari stated September 4 that ―[i]f the need arises and if it is in our national interest, we are ready to test not once, not twice but a hundred times.‖104

India’s Nuclear Cooperation with the United States and Other Countries India has stated its intention to engage in nuclear cooperation with U.S. companies. A September 10, 2008, letter from Indian Foreign Secretary Shivshankar Menon states that it is the intention of the Government of India and its entities to commence discussions with U.S. nuclear energy firms and conclude agreements after entry into force of the [U.S.India] Agreement for cooperation in the construction of nuclear power units at least at two

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sites approved by the Government of India, which would be capable of generating a minimum of 10,000 MW.105

However, Menon appeared to qualify this claim, adding that such deals would be concluded

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on the basis of mutually acceptable technical and commercial terms and conditions that enable a viable tariff regime for electricity generated. It is the expectation of the Government of India that this partnership will contribute towards providing energy to India‘s population in a manner that takes into account affordability, sustainability of nuclear fuel resources and credibility of nuclear waste management.‖

Since the September 2008 NSG decision, India has negotiated nuclear cooperation agreements with NSG countries other than the United States. On September 30, 2008, India and France signed a civil nuclear cooperation agreement that includes the possible provision of nuclear reactors and nuclear fuel. It does not, however, include the transfer of enrichment or reprocessing technology, according to French Ambassador to India Jerome Bonnafont.106 France would like India to reprocess spent nuclear fuel in an IAEA-safeguarded facility, Bonnafont said in late January 2009, but added that France would consider reprocessing the spent fuel for India.107 According to a December 17, 2008, agreement between the French company AREVA and India‘s Department of Atomic Energy, AREVA agreed to supply the Nuclear Power Corporation of India with 300 metric tons of uranium. Those two companies also signed a memorandum of understanding February 4, 2009, expressing their ―willingness to build up to six‖ nuclear reactors. Both parties ―intend to discuss the elements of a commercial contract to supply‖ two reactors ―as a first step,‖ according to the memorandum. Russia and India signed a nuclear cooperation agreement December 5, 2008. According to a joint declaration issued that day, ―the two countries have agreed to collaborate on constructing additional nuclear power plants and ―to expand and pursue further areas for bilateral cooperation in the field of peaceful uses of nuclear energy.‖ Notably, Russian President Dmitry Medvedev reportedly amended in February a 1992 presidential decree on nuclear export controls in order to permit Russian nuclear exports to a country without comprehensive IAEA safeguards. However, the decree now states that nuclear materials, as well as technologies, equipment and special non-nuclear materials intended for their processing, utilization or production may be exported from the Russian Federation to India only if they are used in nuclear installations placed under IAEA guarantees.108

The Russian TVEL Corporation also reportedly signed a nuclear fuel supply contract in February 2009 with India‘s Department of Atomic Energy.109 New Delhi has also concluded other fuel-supply agreements. The Nuclear Power Corporation of India and KazAtomProm, a Kazakh national company, signed a memorandum of understanding January 24, 2009, that reportedly includes a provision for Kazakhstan to supply uranium to India under terms that remain to be determined.110 Additionally, India and Namibia signed an ―Agreement on Cooperation in Peaceful Uses of Nuclear Energy‖ in late August 2009. The scope and terms of the agreement are unclear, but the statement ―resolved

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to encourage Indian investments‖ in the Namibian uranium sector. Similarly, India and Mongolia signed a ―Memorandum of Understanding on Development of Cooperation in the Field of Peaceful Use of Radioactive Minerals and Nuclear Energy‖ in mid-September 2009. The agreement would reportedly enable India to explore for uranium in Mongolia.111 Most recently, India and Argentina, according to an October 14, 2009, joint statement, agreed to ―encourage and support scientific, technical and commercial cooperation for mutual benefit‖ in the ―peaceful uses of nuclear energy.‖

Convention on Supplementary Compensation for Nuclear Damage Menon‘s September 10 letter also stated that ―it is the intention of the Indian Government to take all steps necessary to adhere to the Convention on Supplementary Compensation for Nuclear Damage [CSC] prior to the commencement of international civil nuclear cooperation under‖ the U.S.-India agreement.‖ However, New Delhi has not indicated when it plans to become party to the CSC. India‘s decision to become a party to the convention is, according to the State Department, ―an important step in ensuring that U.S. nuclear firms can compete on a level playing field with other international competitors‖ because many other countries‘ nuclear firms ―have other liability protections afforded to them by their governments.‖112 U.S. firms could engage in nuclear trade with India without the CSC‘s protections, but would likely be very reluctant to do so. The convention has not yet entered into force.

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Other Required Steps Additional Protocol Section 104 (b) (3) of P.L. 109-401 requires a Presidential determination that ―India and the IAEA are making substantial progress toward concluding an Additional Protocol consistent with IAEA principles, practices, and policies that would apply to India‘s civil nuclear program.‖ According to the State Department, ElBaradei concluded September 10 that India has made substantial progress toward concluding such a protocol. The IAEA Board of Governors approved the protocol March 3, 2009, and India signed it May 15, 2009. As previously noted, Additional Protocols, which are based on a Model Additional Protocol, are designed to augment the IAEA‘s ability to detect undeclared nuclear activities in a member-state. Since New Delhi has nuclear weapons and is keeping some of its nuclear facilities outside of safeguards, ―there are bound to be important differences between‖ India‘s Additional Protocol and the Model Protocol, according to the NPAS. Indeed, India‘s Additional Protocol does not contain most of the Model Protocol‘s provisions, requiring only that India provide the IAEA with information about its nuclear exports. Declaration of Nuclear Facilities Section 104 (b) (1) requires that India file ―a declaration regarding its civil facilities and materials with the IAEA.‖ As noted above, a State Department official said that the India‘s submission of this plan does not constitute submission of the declaration required by the safeguards agreement, but does satisfy P.L. 109-401‘s requirement.113 As noted, India has submitted its declaration to the IAEA. New Delhi is neither required to place any new

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facilities under safeguards, nor to adhere to the separation plan. However, an Indian facility must be placed under safeguards in order for it to receive foreign assistance.

Harmonization with NSG/MTCR Guidelines and Adherence to NSG Guidelines Section 104 (b) (6) (B) requires a presidential determination that India has harmonized ―its export control laws, regulations, policies, and practices with the guidelines and practices‖ of the MTCR and the NSG. Section 104 (b) (6) (B) requires a determination that New Delhi adhere to the NSG guidelines. The State Department report assesses that India has harmonized its export control laws with the NSG and MTCR guidelines ―up through the 2005 revisions, and has the means in place to make future updates to its guidelines and control lists.‖114 New Delhi stated its adherence to the NSG guidelines in a September 8, 2008, letter to the IAEA and its adherence to the MTCR guidelines in a September 9, 2008, letter to the MTCR point of contact.115 According to the September NSG statement, the group‘s chair (which rotates each year) ―is requested to consult with India regarding changes to and implementation of‖ the group‘s guidelines. This provision gives New Delhi what is essentially a non-binding consultative role in formulating changes to the guidelines. India had been reluctant to adhere to the guidelines because they sometimes change and New Delhi, as a non-member, will not be able to participate in the Group‘s decisions regarding such changes.116

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The Atomic Energy Act and Consultations with Congress Under existing law (Atomic Energy Act [AEA] of 1954; P.L. 95-242; 42 U.S.C. § 2153 et seq.) all significant nuclear cooperation requires an agreement for cooperation.117 The Nuclear Non-Proliferation Act of 1978 (NNPA) amended the Atomic Energy Act of 1954 to include, among other things, a requirement for full-scope safeguards for significant nuclear exports to nonnuclear-weapon states.118 At issue are the requirements for full-scope nuclear safeguards contained in Section 123 a. (2) for approval of an agreement for cooperation and in Section 128 for licensing nuclear exports. India, a non-party to the NPT, does not have full-scope safeguards, nor is it ever expected to adopt full- scope safeguards, since it has a nuclear weapons program that would preclude them. Also at issue is the requirement in Section 129 to stop exports if a nonnuclear-weapon state has detonated a nuclear device after 1978, among other things. India detonated several nuclear devices in 1998. These three sections of the AEA provide mechanisms for the President to waive those requirements and sanctions (in Section 129), which are spelled out in more detail below. The sections also provide legislative vetoes, in the form of concurrent resolutions, of the presidential determinations. In 1983, however, the Supreme Court decided in INS v. Chadha that legislative veto provisions that do not satisfy the bicameralism and presentment requirements of Article I of the Constitution were unconstitutional. In 1985, some parts of the AEA were amended to provide for joint resolutions of approval or disapproval (e.g., Section 123 d.). The Chadha decision affects how Congress would disapprove of such presidential determinations under existing law and therefore affects the impact of the Administration‘s proposed legislation.

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Agreements for Cooperation Section 123 of the AEA (42 U.S.C. 2153) specifies what must happen before nuclear cooperation can take place. 

Section 123 a. states that the proposed agreement shall include the terms, conditions, duration, nature, and scope of cooperation and lists nine criteria that the agreement must meet. It also contains provisions for the President to exempt an agreement from any of the nine criteria, and includes details on the kinds of information the executive branch must provide to Congress;



Section 123 b. specifies the process for submitting the text of the agreement to Congress;



Section 123 c. specifies how Congress approves cooperation agreements that are limited in scope (e.g., do not transfer nuclear material or cover reactors larger than 5 MWe.).119



Section 123 d. specifies how Congress approves agreements that do cover significant nuclear cooperation (transfer of nuclear material or reactors larger than 5 MWe), including exempted agreements.

The United States has more than 20 agreements for cooperation in place now, and had an agreement with India from 1963 to 1993. Such agreements for cooperation are ―framework‖ agreements—they do not guarantee that cooperation will take place or that nuclear material will be transferred, but rather set the terms of reference and provide authorization for cooperation. The 1963 U.S.-India cooperation agreement is anomalous in that it did guarantee fuel for the Tarapur reactors, even though other U.S. nuclear cooperation agreements reportedly have not included any such guarantees.120 Section 123 a. lists nine criteria that an agreement must meet unless the President determines an exemption is necessary. These are listed in Section 123 a., paragraphs (1) through (9), 42 U.S.C. 2153. They are guarantees that (1) safeguards on nuclear material and equipment transferred continue in perpetuity; (2) full-scope safeguards are applied in nonnuclear-weapon states; (3) nothing transferred is used for any nuclear explosive device or for any other military purpose; (4) the United States has the right of return if the cooperating state detonates a nuclear explosive device or terminates or abrogates an International Atomic Energy Agency (IAEA) safeguards agreement; (5) there is no transfer of material or classified data without U.S. consent; (6) physical security is maintained; (7) there is no enrichment or reprocessing by the recipient state without prior approval; (8) storage is approved by United States for plutonium and highly enriched uranium; and (9) anything produced through cooperation is subject to all of the above requirements. In the case of India, the most difficult of these requirements to meet is the full-scope safeguards requirement for non-nuclear-weapon states (Sec. 123 a. (2)). India is considered to be a nonnuclear-weapon state because it did not, as defined by the nuclear Nonproliferation Treaty, explode a nuclear device before January 1, 1967.121 The President may exempt an agreement for cooperation from any of the requirements in Section 123 a. if he determines

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that meeting the requirement would be ―seriously prejudicial to the achievement of U.S. nonproliferation objectives or otherwise jeopardize the common defense and security.‖ An exempted agreement would not become effective ―unless the Congress adopts, and there is enacted, a joint resolution stating that the Congress does favor such agreement.‖122 In other words, both chambers of Congress must approve the agreement if it does not contain all of the Section 123 a. requirements. If Congress votes to approve an agreement for cooperation that was exempted because the recipient state did not have full-scope safeguards (Section 123 a. (2)), such approval would essentially waive the Nuclear Regulatory Commission‘s (NRC) obligation to consider full-scope safeguards as an export license authorization criterion under Section 128. However, Congress would still have the authority to review one export license authorization approximately every 12 months after the agreement for cooperation has entered into force (see discussion below). Section 123 d., in part, states the following:

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if Congress fails to disapprove a proposed agreement for cooperation which exempts the recipient nation from the requirement set forth in subsection 123 a. (2), such failure to act shall constitute a failure to adopt a resolution of disapproval pursuant to subsection 128 b. (3) for purposes of the Commission‘s consideration of applications and requests under section 126 a. (2) and there shall be no congressional review pursuant to section 128 of any subsequent license or authorization with respect to that state until the first such license or authorization which is issued after twelve months from the elapse of the sixty-day period in which the agreement for cooperation in question is reviewed by the Congress.123

Export Licensing In addition to specifying criteria for framework agreements, the AEA sets out procedures for licensing exports (Sections 126, 127, and 128 codified as amended at 42 U.S.C. 2155, 2156, 2157). The NRC is required to meet criteria in Sections 127 and 128 for authorizing export licenses; Section 128 contains the requirement for full-scope safeguards for nonnuclear-weapon states. Section 126 b. (2) contains a provision for the President to authorize an export in the event that the NRC deems that the export would not meet Section 127 and 128 criteria. The President must determine ―that failure to approve an export would be seriously prejudicial to the achievement of U.S. nonproliferation objectives or otherwise jeopardize the common defense and security.‖ In that case, the President would submit his executive order, along with a detailed assessment and other documentation, to Congress for 60 days of continuous session. After 60 days of continuous session, the export would go through unless Congress were to pass a concurrent resolution of disapproval. 124 In the case of exports pursuant to an exempted agreement for cooperation as described above, the NRC does not have to meet the full-scope safeguards requirement in assessing whether it can issue export licenses (Section 128 b. (3)). If the NRC were to issue such a license, Congress would review one license every 12 months. If Congress were to pass a resolution of disapproval, no further exports could be made during that Congress.125 In both cases, Section 128 contains a provision for the President to waive termination of exports by notifying the Congress that the state has adopted full-scope safeguards or that the state has made significant progress toward full-scope safeguards, or that U.S. foreign policy

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interests dictate reconsideration. Such a determination would become effective unless Congress were to disagree with the President‘s determination.126

Termination of Cooperation Section 129 of the AEA (42 U.S.C. 2158) requires ending exports of nuclear materials and equipment or sensitive nuclear technology to any non-nuclear-weapon state that, after March 10, 1978, the President determines to have    

detonated a nuclear explosive device; terminated or abrogated IAEA safeguards; materially violated an IAEA safeguards agreement; or engaged in activities involving source or special nuclear material and having ―direct significance‖ for the manufacture or acquisition of nuclear explosive devices, and ―has failed to take steps which, in the President‘s judgment, represent sufficient progress toward terminating such activities.‖

In addition, Section 129 would also halt exports to any nation the President determines to have 

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

materially violated the terms of an agreement for cooperation with the United States, or assisted, encouraged, or induced any other non-nuclear-weapon state to obtain nuclear explosives or the materials and technologies needed to manufacture them; or re-transferred or entered into an agreement for exporting reprocessing equipment, materials or technology to another non-nuclear-weapons state.

The President can waive termination if he determines that ―cessation of such exports would be seriously prejudicial to the achievement of United States nonproliferation objectives or otherwise jeopardize the common defense and security.‖ The President must submit his determination to Congress, which is then referred to the House International Relations Committee and the Senate Foreign Relations Committee for 60 days of continuous session. The determination becomes effective unless Congress opposes it. 127

P.L. 109-401128 On March 9, 2006, the Administration submitted its proposed legislation to Representative Hyde and Senator Lugar, and on March 16, 2006, Representatives Hyde and Lantos introduced H.R. 4974, and Senator Lugar introduced S. 2429. Following public hearings and committee mark-ups, the House passed H.R. 5682 on July 26, 2006, by a vote of 359 to 68 and the Senate passed its version of H.R. 5682, substituting the text of the amended S. 3709, on November 16, 2006, by a vote of 85 to 12. One issue that held up the Senate bill was the inclusion, in Title II, of the implementing legislation for the U.S. Additional Protocol—an agreement between the United States and the IAEA to provide for enhanced information, access, and inspection tools for IAEA inspectors as they inspect U.S. nuclear and other facilities under the U.S. voluntary safeguards agreement.

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The House and Senate version of the H.R. 5682 were remarkably similar, with four differences.129 The Senate version contained an additional requirement for the President to execute his waiver authority, an amendment introduced by Senator Harkin and adopted by unanimous consent that the President determine that India is ―fully and actively participating in U.S. and international efforts to dissuade, sanction and contain Iran for its nuclear program.‖ This provision was changed to a reporting requirement in the conference report. The Senate version also had two unique sections related to the cooperation agreement, Sections 106 and 107, both of which appear in the conference report. Section 106 (now Section 104 (d) (4)) prohibits exports of equipment, material or technology related for uranium enrichment, spent fuel reprocessing or heavy water production unless conducted in a multinational facility participating in a project approved by the IAEA or in a facility participating in a bilateral or multilateral project to develop a proliferation- resistant fuel cycle. Section 107 (now Section 104 (d) (5)) would establish a program to monitor that U.S. technology is being used appropriately by Indian recipients. Finally, the Senate version also contained the implementing legislation for the U.S. Additional Protocol in Title II, which was retained in the conference report. P.L. 109-401 allows the President to  

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

exempt a proposed agreement for cooperation with India from the full-scope safeguards requirement of Section 123 a. (2) of the Atomic Energy Act; exempt an agreement from any export review by the Congress under Section 128 of the AEA; exempt the agreement from restrictions resulting from India‘s nuclear weapons activities under Section 129 a. (1) (D) of the AEA, and exempt the agreement from a cutoff in exports because of India‘s 1998 nuclear test.

It does not exempt the agreement from a future cutoff in exports if India tests a nuclear explosive device again. For the President to exercise his waiver authority, seven requirements, as outlined earlier, must be met. P.L. 109-401 contains numerous statements of policy and reporting requirements, as well as restrictions on certain kinds of transfers. There are specific prohibitions on (as outlined in Section 104 (d)): (1) transfers that would violate U.S. obligations under Article 1 of the NPT not to in any way assist any country to manufacture or otherwise acquire nuclear weapons; (2) transfers that would violate NSG guidelines in force at the time; (3) enrichment and reprocessing cooperation, except to ―a multinational facility participating in an IAEA-approved program to provide alternatives to national fuel cycle capabilities; or ... a facility participating in, and the export, reexport, transfer, or retransfer is associated with, a bilateral or multinational program to develop a proliferation-resistant fuel cycle.‖ Additionally, the law requires a cutoff in exports if India is found to have violated NSG or MTCR guidelines. P.L. 109-401 also provides for a nuclear export accountability program (formerly Section 107 of the Senate version of H.R. 5682).

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President’s Signing Statement

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In President Bush‘s signing statement, he noted that the act ―will strengthen the strategic relationship between the United States and India.‖130 With respect to particular provisions, President Bush stated that the executive branch would construe two sections of the bill as ―advisory‖ only: policy statements in Section 103 and the restriction contained in Section 104 (d) (2) on transferring items to India that would not meet NSG guidelines. On the first, the President cited the Constitution‘s ―commitment to the presidency of the authority to conduct the Nation‘s foreign affairs‖; on the second, the President raised the question of whether the provision ―unconstitutionally delegated legislative power to an international body.‖ In other words, the President was questioning whether Congress were ceding authority to approve U.S. exports to the NSG. However, U.S. officials, including Secretary of State Rice, have formally told Congress multiple times that the United States government would abide by NSG guidelines. The President‘s signing statement also noted that the executive branch would construe ―provisions of the Act that mandate, regulate, or prohibit submission of information to the Congress, an international organization, or the public, such as sections 104, 109, 261, 271, 272, 273, 274, and 275, in a manner consistent with the President‘s constitutional authority to protect and control information that could impair foreign relations, national security, the deliberative processes of the Executive, or the performance of the Executive‘s constitutional duties.‖ This seems to suggest that the executive branch might limit the scope of reporting required by Congress in those sections, not just on national security grounds, but to protect executive branch processes or performance. The implications of the approach outlined in this signing statement will not be clear until the executive branch produces (or does not produce, as the case may be) required reports.

ISSUES FOR CONGRESS The Nuclear Cooperation Agreement The agreement announced in July 2007 by the United States and India lists a variety of civilian nuclear projects on which the two countries ―may pursue cooperation.‖ Although the Bush administration argued that the agreement ―is consistent with applicable U.S. law,‖131 some members of Congress expressed concern that it may be inconsistent with parts of P.L. 109-401. For example, H.Res. 711, which was referred to the House Committee on Foreign Affairs October 4, 2007, stated that ―it is the sense of the House of Representatives‖ that the Bush administration should not propose changes to NSG guidelines until it has resolved ―all differences of interpretation‖ of the agreement with New Delhi and ―answered all outstanding questions raised by Congress regarding apparent inconsistencies between the nuclear cooperation agreement‖ and P.L. 109-401. Non-governmental experts also raised questions about several aspects of the agreement, arguing that they may be inconsistent with P.L. 109401.132

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Sensitive Nuclear Technology Transfers Despite restrictions in P.L. 109-401 regarding U.S. exports of equipment, material or technology related to uranium enrichment, spent fuel reprocessing or heavy water production, the agreement states that Sensitive nuclear technology, heavy water production technology, sensitive nuclear facilities, heavy water production facilities and major critical components of such facilities may be transferred under this Agreement pursuant to an amendment to this Agreement.

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However, the agreement also states that ―transfers of dual-use items that could be used in enrichment, reprocessing or heavy water production facilities will be subject to the Parties‘ respective applicable laws, regulations and license policies.‖ Such transfers would, therefore, be subject to the same restrictions described in P.L. 109-401. Any other transfers of such technology would require changes to existing U.S. law. The State Department has said that Washington does not intend to negotiate an amendment to the agreement.133 Furthermore, ―as a matter of policy, the United States does not transfer dual-use items for use in sensitive nuclear facilities‖ and ―will not assist India in the design, construction, or operation of sensitive nuclear technologies through the transfer of dual-use items, whether under the [123] Agreement or outside the Agreement,‖ according to the State Department. 134

Nuclear Testing/Right of Return P.L. 109-401 does not exempt the agreement from a future cutoff in exports if India tests a nuclear explosive device again.135 However, the agreement does not explicitly mention U.S. responses to such a test of such a device. Instead, the agreement states that ―either Party shall have the right to terminate this Agreement prior to its expiration on one year‘s written notice to the other Party‖—that is, the agreement does not limit the grounds upon which the agreement may be terminated. Similarly, the agreement provides that the party seeking termination has the right to cease further cooperation under this Agreement if it determines that a mutually acceptable resolution of outstanding issues has not been possible or cannot be achieved through consultations.

This provision means that nuclear cooperation under the agreement may be terminated by a party during the one-year notice period for termination of the agreement. The agreement also specifies that the two governments are to ―hold consultations‖ prior to ceasing cooperation or terminating the agreement. The United States and India are to take into account whether the circumstances that may lead to termination or cessation resulted from a Party‘s serious concern about a changed security environment or as a response to similar actions by other States which could impact national security.

This provision suggests that, in the event that India conducts a nuclear explosive test, New Delhi may argue that the agreement should not be terminated (and nuclear cooperation should not cease) because geopolitical circumstances justified the test. However, in such

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cases, the U.S. right to terminate and cease cooperation under this provision would not be constrained by the results of the consultations. With regard to the U.S. right of return, Section 123 a. (4) of the AEA requires that nuclear cooperation agreements include a stipulation that the United States shall have the right to require the return of any nuclear materials and equipment transferred pursuant thereto and any special nuclear material produced through the use thereof if the cooperating party detonates a nuclear explosive device or terminates or abrogates an agreement providing for IAEA safeguards.

The July agreement states that, following the cessation of cooperation under this agreement, either party has the right to require the return of ―any nuclear material, equipment, non-nuclear material or components transferred under this Agreement and any special fissionable material produced through their use.‖ However, the agreement does not say explicitly that a future Indian test of a nuclear explosive device would allow the United States to exercise its right of return. Rather, it provides for a right of return whenever a party has given notice of termination of the agreement and has ceased nuclear cooperation, which would include but not be limited to the circumstances specified in section 123 .a(4) of the AEA. The agreement also provides that a ―notice by a Party that is invoking the right of return shall be delivered to the other Party on or before the date of termination of this Agreement.‖ This means that the right of return cannot be exercised after the one-year interval prior to the agreement‘s termination.

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Fuel Supply A closely related issue is the agreement‘s four assurances regarding India‘s future nuclear fuel supply: 

 



The United States is willing to incorporate assurances regarding fuel supply in the bilateral U.S.-India agreement on peaceful uses of nuclear energy under Section 123 of the U.S. AEA, which would be submitted to the U.S. Congress. The United States will join India in seeking to negotiate with the IAEA an Indiaspecific fuel supply agreement. The United States will support an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India‘s reactors. If, despite these [above] arrangements, a disruption of fuel supplies to India occurs, the two governments would jointly convene a group of friendly supplier countries (including countries such as Russia, France, and the United Kingdom) to pursue such measures as would restore fuel supply to India.

The last two provisions are particularly controversial because they could potentially provide India a way to mitigate the effects of a U.S. cessation of nuclear exports (in the event that, for example, India were to test a nuclear weapon).136 Indeed, Indian Foreign Secretary Shyam Saran asserted in a February 18, 2008, statement that, under the 123 agreement, India is entitled to build a strategic fuel reserve ―to last the lifetime of such reactors.‖ And a spokesperson for India‘s ruling Congress Party indicated in September 2008 that reserve

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supplies of fuel would enable New Delhi to continue operating its reactors even if other countries were to halt cooperation in response to an Indian nuclear test.137 P.L. 109-401 contains several provisions that could be in tension with the July agreement. For example, Section 103 (b) (10) addresses the issue of a fuel reserve: Any nuclear power reactor fuel reserve provided to the Government of India for use in safeguarded civilian nuclear facilities should be commensurate with reasonable reactor operating requirements.

With regard to supplying India with nuclear fuel after a nuclear test, Section 103 a. (6)138 says that the United States should

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Seek to prevent the transfer to a country of nuclear equipment, materials, or technology from other participating governments in the NSG or from any other source if nuclear transfers to that country are suspended or terminated.... ‖

Similarly, Section 102 (13) expresses the sense of Congress that the United States ―should not seek to facilitate or encourage the continuation of nuclear exports to India by any other party if such exports are terminated under United States law.‖ However, President Bush‘s September 10 message transmitting the agreement to Congress characterizes the agreement‘s fuel-supply assurances as ―political commitments‖ that are not ―legally binding‖ because the agreement is only a ―framework agreement‖ that does not compel specific nuclear cooperation. Furthermore, according to the State Department, the ―disruption of fuel supplies‖ referred to in the agreement refers only to disruptions ―that may result through no fault‖ of India‘s. 139 Regarding the question of non-U.S. suppliers, Washington has not sought commitments from any other country to supply fuel to India. The ―United States would be compelled to encourage transfers of nuclear fuel to India by other‖ NSG members if supply disruptions ―occur through no fault of India‘s own,‖ according to the State Department.140 However, these assurances ―are not ... meant to insulate India against the consequences of a nuclear explosive test or a violation of nonproliferation commitments.‖ Indeed, such U.S. commitments ―would no longer apply‖ if the United States were to terminate the agreement in response to an Indian nuclear test. With respect to fuel reserves, the agreement does not define what it means to ―support an Indian effort to develop a strategic reserve.‖ Furthermore, the State Department suggests that the United States may not supply India with a fuel reserve sufficient for the lifetime of India‘s reactors, though the department‘s 2008 responses to Questions for the Record do not specify the size of any such reserve.141

P.L. 110-369—KEY PROVISIONS As noted above, the House passed H.R. 7081, which approved the nuclear cooperation agreement, September 27, 2008.142 The Senate Committee on Foreign Relations had, following a September 18 hearing and subsequent markup, approved identical legislation, S.

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3548 (introduced by Senator Christopher Dodd), September 23. The Senate passed H.R. 7081 October 1. President Bush signed P.L. 110-369 into law October 8, 2008. P.L. 110-369, the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, obviated the 30-day consultative period, as well as other procedures cited in sections 123 b. and d. of the AEA. Section 101 states that ―notwithstanding the provisions for congressional consideration and approval of a proposed agreement for cooperation‖ in those two sections, ―Congress hereby approves the United States-India Agreement for Cooperation on Peaceful Uses of Nuclear Energy.‖ It also states that the agreement ―shall be subject to‖ applicable U.S. law as if it had been approved according to section 123‘s provisions.

Declarations of Policy P.L. 110-369 contains several declarations of U.S. policy. Section 102 (a) states that ―it is the understanding of the United States‖ that the agreement‘s provisions

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have the meanings conveyed in the authoritative representations provided by the President and his representatives to the Congress and its committees prior to September 20, 2008, regarding the meaning and legal effect of the Agreement.

As noted above, some lawmakers had previously expressed concern about ambiguities in the agreement and whether it met the requirements of P.L. 109-401. During the debate over the bill, Berman stated September 26 that ―I continue to have concerns about ambiguities in the agreement‖ and inserted the State Department‘s January 2008 responses to the committee‘s questions into the record in order to ―clarify the meaning of these and other important issues.‖ The documents ―constitute key and dispositive parts of the ‗authoritative representations‘ described in section 102,‖ he added. The law contains two other provisions apparently designed to clarify that the agreement‘s fuel reserve and fuel supply provisions are not intended to provide New Delhi a way to test nuclear weapons without fear of consequence. The first, section 102 (b) (1), states that ―in the event that nuclear transfers to India are suspended or terminated‖ pursuant to U.S. law, ―it is the policy of the United States to seek to prevent the transfer to India of nuclear equipment, materials, or technology‖ from other NSG participants ―or from any other source.‖ This provision is also contained in section 103 (a)(6) of P.L. 109-401. The second, section 102 (b)(2), restates a provision contained in section 103 (b) (10) of P.L. 109- 401 regarding the fuel reserve: Any nuclear power reactor fuel reserve provided to the Government of India for use in safeguarded civilian nuclear facilities should be commensurate with reasonable reactor operating requirements.

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Certification Requirements P.L. 110-369 contains two certification requirements that had to be met before the United States could exchange diplomatic notes with India—a step which, as noted above, was necessary for the agreement to enter into force. Section 102 (c) requires the President to certify to Congress that the agreement is ―consistent with‖ U.S. obligations under Article I of the NPT. Section 204 (a) requires the President to certify to the Senate Foreign Relations Committee and the House Foreign Affairs Committee that it is U.S. policy to work with NSG members ―to agree to further restrict the transfers of equipment and technology related to the enrichment of uranium and reprocessing of spent nuclear fuel.‖ President Bush transmitted the certifications, along with a Memorandum of Justification, October 20, 2008. The memorandum did not explain the reasoning underlying the determinations. In addition, Section 204 (b) states that

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the President shall seek to achieve, by the earliest possible date, either within the NSG or with relevant NSG Participating Governments, the adoption of principles, reporting, and exchanges of information as may be appropriate to assure peaceful use and accounting of byproduct material in a manner that is substantially equivalent to the relevant provisions [of the nuclear cooperation agreement].

There is no certification requirement for this provision, although section 204(c) requires the President to submit a report every six months on U.S. efforts to achieve these changes. Section 104 of P.L. 110-369 requires that, before the NRC can issue export licenses, the President must determine and certify to Congress that India‘s IAEA safeguards agreement has entered into force and that New Delhi‘s declaration of its nuclear facilities to the IAEA ―is not materially inconsistent with the facilities and schedule‖ described in India‘s separation plan. As noted, India signed its safeguards agreement February 2, 2009, and it entered into force May 11, 2009. New Delhi filed its declaration with the IAEA in October 2009, but the President has not submitted the required certification.

Reporting Requirements P.L. 110-369 adds several reporting requirements to P.L. 109-401. It amends section 104 (g)(1) to require that the President inform the Senate Foreign Relations Committee and the House Foreign Affairs Committee of ―any material inconsistencies‖ with respect to content or timing between India‘s separation plan and the notifications New Delhi is to provide to the IAEA pursuant to paragraph 14 of India‘s safeguards agreement. P.L. 110-369 also amends section 104(g)(2) to require the President to report on a variety of activities that could be undertaken pursuant to the nuclear cooperation agreement. Section 202 of P.L. 110-369 amends section 123 of the AEA to require the President to keep the Senate Foreign Relations Committee and the House Foreign Affairs Committee ―fully and currently informed of any initiative or negotiations relating to a new or amended agreement for peaceful nuclear cooperation.‖143

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Procedures for Subsequent Arrangements

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The nuclear cooperation agreement grants New Delhi consent to reprocess nuclear material transferred pursuant to the agreement, as well as ―nuclear material and by-product material used in or produced through the use of nuclear material, non-nuclear material, or equipment so transferred.‖ However, India must first ―establish a new national reprocessing facility dedicated to reprocessing safeguarded nuclear material under IAEA safeguards.‖ In addition, the United States and India must ―agree on arrangements and procedures under which such reprocessing or other alteration in form or content will take place in this new facility.‖ The agreement also says that the two governments must begin ―consultations‖ on the relevant arrangements and procedures within six months of a request from India. The consultations are to be ―concluded within one year.‖ New Delhi made such a request February 3, 2009, and the two governments held meetings in July and October.144 India is reportedly insisting that India and the United States conclude an agreement on the facility before New Delhi signs contracts with U.S. nuclear firms.145 India has not notified the United States of ―any specific plans nor a schedule for establishing a new national reprocessing facility. ‖146 Section 201 of P.L. 110-369 specifies procedures for Congress to consider such a subsequent arrangement. First, the President must transmit to the Senate Foreign Relations Committee and the House Foreign Affairs Committee a report describing the reasons for the proposed arrangement, a description (including the text) of the arrangement, and a certification that the United States will pursue efforts to ensure that any other nation that permits India to reprocess or otherwise alter in form or content nuclear material that the nation has transferred to India or nuclear material and by-product material used in or produced through the use of nuclear material, non-nuclear material, or equipment that it has transferred to India requires India to do so under similar arrangements and procedures.

In addition, 30 days of continuous session must elapse after the President has submitted the report. The proposed arrangement shall not take effect if Congress adopts a joint resolution of disapproval within this 30-day period. Section 201 requires that such a resolution ―be considered pursuant to the procedures set forth in section 130 i‖ of the AEA. Section 205, however, shortens from 45 to 15 days the amount of time that the Senate Foreign Relations Committee and the House Foreign Affairs Committee have to report the resolution.147

APPENDIX. INDIA’S SEPTEMBER 5, 2008, STATEMENT ON DISARMAMENT AND NONPROLIFERATION Statement by External Affairs Minister of India Shri Pranab Mukherjee on the Civil Nuclear Initiative

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To reiterate India‘s stand on disarmament and nonproliferation, EAM has made the following statement: A Plenary meeting of the Nuclear Suppliers Group to consider an exception for India from its guidelines to allow for full civil nuclear cooperation with India is being held in Vienna from September 4-5, 2008. India has a long-standing and steadfast commitment to universal, non-discriminatory and total elimination of nuclear weapons. The vision of a world free of nuclear weapons which Shri Rajiv Gandhi put before the UN in 1988 still has universal resonance. We approach our dialogue with the Nuclear Suppliers Group and all its members in a spirit of cooperation that allows for an ongoing frank exchange of views on subjects of mutual interest and concern. Such a dialogue will strengthen our relationship in the years to come. Our civil nuclear initiative will strengthen the international non-proliferation regime. India believes that the opening of full civil nuclear cooperation will be good for India and for the world. It will have a profound positive impact on global energy security and international efforts to combat climate change. India has recently submitted a Working Paper on Nuclear Disarmament to the UN General Assembly, containing initiatives on nuclear disarmament. These include the reaffirmation of the unequivocal commitment of all nuclear weapon States to the goal of complete elimination of nuclear weapons; negotiation of a Convention on the complete prohibition of the use or threat of use of nuclear weapons; and negotiation of a Nuclear Weapons Convention prohibiting the development, production, stockpiling and use of nuclear weapons and on their destruction, leading to the global, non-discriminatory and verifiable elimination of nuclear weapons within a specified timeframe. We remain committed to a voluntary, unilateral moratorium on nuclear testing. We do not subscribe to any arms race, including a nuclear arms race. We have always tempered the exercise of our strategic autonomy with a sense of global responsibility. We affirm our policy of no-first-use of nuclear weapons. We are committed to work with others towards the conclusion of a multilateral Fissile Material Cut-off Treaty in the Conference on Disarmament that is universal, nondiscriminatory and verifiable. India has an impeccable non-proliferation record. We have in place an effective and comprehensive system of national export controls, which has been constantly updated to meet the highest international standards. This is manifested in the enactment of the Weapons of Mass Destruction and their Delivery Systems Act in 2005. India has taken the necessary steps to secure nuclear materials and technology through comprehensive export control legislation and through harmonization and committing to adhere to Missile Technology Control Regime and Nuclear Suppliers Group guidelines. India will not be the source of proliferation of sensitive technologies, including enrichment and reprocessing transfers. We stand for the strengthening of the non-proliferation regime. We support international efforts to limit the spread of ENR equipment or technologies to states that do not have them. We will work together with the international community to advance our common objective of non-proliferation. In this regard, India is interested in participating as a supplier nation, particularly for Thorium-based fuel and in establishment of international fuel banks, which also benefit India. India places great value on the role played by the IAEA‘s nuclear safeguards system. We look forward to working with the IAEA in implementing the India-specific Safeguards Agreement concluded with the IAEA. In keeping with our commitment to sign and adhere to an Additional Protocol with respect to India‘s civil nuclear facilities, we are working closely

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Paul K. Kerr with the IAEA to ensure early conclusion of an Additional Protocol to the Safeguards Agreement.

End Notes

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1

The full text of the agreement, which was released August 3, 2007, can be found at http://www.state.gov/r/pa/prs/ps/ 2007/aug/90050.htm. 2 The relevant documents are available at http://foreignaffairs.house.gov/press_display.asp?id=555. 3 For an analysis of the proliferation implications of U.S. nuclear exports to India, see Gary Milhollin, ―Stopping the Indian Bomb,‖ The American Journal of International Law, July 1987, 81 A.J.I.L. 593. See http://www.wisconsinproject.org/pubs/articles/1987/stoppingindianbomb.htm. 4 The NNPA, in part, amended the Atomic Energy Act of 1954. See 42 U.S.C. 2151 et seq. Prior to the 1970 NPT, safeguards (inspections, material protection, control and accounting) were applied to specific facilities or materials (known as INFCIRC/66-type agreements). The NPT required safeguards on all nuclear material in all peaceful nuclear activities for non-nuclear-weapon-state parties (those states not having detonated a nuclear explosive device prior to January 1, 1967). 5 IAEA Document INFCIRC/254, Guidelines for Transfers of Nuclear-related Dual-use Equipment, Materials, Software, and Related Technology. Part 1 covers ―trigger list‖ items: those especially designed or prepared for nuclear use: (i) nuclear material; (ii) nuclear reactors and equipment; (iii) non-nuclear material for reactors; (iv) plant and equipment for reprocessing, enrichment and conversion of nuclear material and for fuel fabrication and heavy water production; and (v) associated technology. Part 2 covers dual-use items. Additional NSG criteria for dual-use exports include NPT membership and/or full-scope safeguards agreement; appropriate end-use; whether the technology would be used in a reprocessing or enrichment facility; the state‘s support for nonproliferation; and the risk of potential nuclear terrorism. 6 China was not a member of the NSG until 2004. Russia, an NSG member, exported fuel, citing a safety exception, but NSG members objected so strongly that Russia suspended supply in 2004. Russia agreed to resupply Tarapur in late February and informed the NSG on February 27, 2006, reportedly citing the NSG safety exception. 7 See also CRS Report RL33072, U.S.-India Bilateral Agreements and "Global Partnership", by K. Alan Kronstadt, and CRS Report RL33529, India-U.S. Relations, by K. Alan Kronstadt. 8 See fact sheet on the NSSP at http://www.state.gov/r/pa/prs/ps/2004/36290.htm. 9 Joint Statement Between President George W. Bush and Prime Minister Manmohan Singh, White House Press Release, July 18, 2005, Washington, DC (hereafter cited as ―July 18 Joint Statement‖) http://www.whitehouse.gov/ news/releases/2005/07/2005071 8-6.html. 10 July 18 Joint Statement. 11 See CRS Report RS22474, Banning Fissile Material Production for Nuclear Weapons: Prospects for a Treaty (FMCT), by Sharon Squassoni, for more detailed information about the issue and negotiations. 12 Opening Statement, Chairman Richard G. Lugar, Senate Foreign Relations Committee hearing on ―Implications of U.S.-India Nuclear Energy Cooperation,‖ November 2, 2005 (hereafter referred to as November 2, 2005 SFRC India hearing). 13 The House International Relations Committee held the following hearings: ―The U.S. and India: An Emerging Entente?‖ (September 8, 2005); ―The U.S.-India Global Partnership: The Impact on Nonproliferation‖ (October 26, 2005); and ―U.S.-India Global Partnership: How Significant for American Interests?‖ (November 16, 2005); ―The U.S.- India Global Partnership‖ (April 5, 2006); ―U.S.-India Global Partnership: Legislative Options‖ (May 11, 2006). See http://www.internationalrelations.house.gov/ for testimonies of witnesses. The Senate Foreign Relations Committee held the following hearings: ―Implications of U.S.-India Nuclear Energy Cooperation‖ (November 2, 2005); ―U.S.- India Atomic Energy Cooperation: The Indian Separation Plan and the Administration‘s Legislative Proposal‖ (April 5, 2006); and ―U.S.-India Atomic Energy Cooperation: Strategic and Nonproliferation Implications‖ (April 26, 2006). See http://foreign.senate.gov/hearing.html for testimonies. 14 Statement of Under Secretary of State for Political Affairs, R. Nicholas Burns, September 8, 2005, House Committee on International Relations, Hearing on ―The U.S. and India: An Emerging Entente?‖ (hereafter cited as ―September 8, 2005, HIRC US-India hearing‖) p. 1. 15 Remarks by Congressman Jim Leach, September 8, 2005, House International Relations Committee U.S.-India Hearing. 16 Henry Sokolski, ―Implementing the Indian Nuclear Deal: What‘s at Risk, What Congress Should Require,‖ Briefing to Congress, September 2005. 17 See ―India‘s Growth Target Unrealistic,‖ Financial Times, January 23, 2003, which quotes the Asia Development Bank.

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18

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Brahma Chellaney, ―US Deal is a Bad Choice for Power Generation,‖ International Herald Tribune, December 27, 2005. 19 Statement of Under Secretary of State for Political Affairs, R. Nicholas Burns, November 2, 2005, Senate Foreign Relations Committee Hearing on Implications of U.S.-India Nuclear Energy Cooperation. 20 See Miriam Rajkumar, ―Indian Independence,‖ Carnegie Analysis, September 20, 2005, at http://www.carnegieendowment.org/npp/publications/index.cfm?fa=view&id=17486. 21 Dr. Francine Frankel, Statement before the House International Relations Committee, November 16, 2005, ―India‘s Potential Importance for Vital U.S. Geopolitical Objectives in Asia: A Hedge Against a Rising China?‖ 22 ―Press Briefing by Foreign Secretary on the events in UN and IAEA,‖ New Delhi, September 26, 2005, available at http://www.indianembassy.org/press_release/2005/Sept/29.htm. 23 Briefing by MEA Official Spokesperson on Draft Resolution on Iran in IAEA, New Delhi, September 24, 2005, available at http://www.indianembassy.org/press_release/2005/Sept/16.htm. 24 See CRS Report RL34544, Iran’s Nuclear Program: Status, by Paul K. Kerr. 25 ―U.S.-India Nuclear Deal Could Die, Envoy Warns,‖ Washington Post, January 26, 2006. 26 ―Ahmadinejad Thanks India for Positive Stands on Iran in IAEA,‖ IRNA, September 23, 2005. 27 September 26, 2005 press briefing, op. cit. 28 Iran Republic News Agency, ―118 countries back Iran‘s nuclear program‖ Iran Times, September 18, 2006. 29 See CRS Report RS22530, India and Iran: WMD Proliferation Activities, by Sharon Squassoni, for more information related to sanctions imposed for Indian transfers to Iran. 30 See http://www.nti.org/e_research/profiles/Iran/2867.html. 31 ―India Denies Nuclear Cooperation with Iran,‖ Agence France Presse, December 13, 2003. 32 John Larkin and Jay Solomon, ―As Ties Between India and Iran Rise, U.S. Grows Edgy,‖ Wall Street Journal, March 24, 2005. 33 Thionyl chloride is a Schedule 3 chemical under the Chemical Weapons Convention. It has military and civilian uses, and is widely used in the laboratory and in industry. 34 See list of sanctions at http://www.state.gov/t/isn/c15234.htm. 35 The full text of Mukherjee‘s statement is in the Appendix. 36 David Albright and Susan Basu, ―India‘s Gas Centrifuge Program: Stopping Illicit Procurement and the Leakage of Technical Centrifuge Know-How.‖ Available at http://www.isis-online.org/publications/southasia/ indianprocurement.pdf. 37 David Albright and Paul Brannan, ―Indian Nuclear Export Controls and Information Security: Important Questions Remain.‖ Available at http://www.isis-online.org/publications/southasia/India_ 18September2008.pdf. 38 ―Questions for the Record Submitted to Under Secretaries Nicholas Burns and Robert Joseph by Chairman Richard G. Lugar (#6), Senate Foreign Relations Committee, November 2, 2005.‖ 39 September 8, 2005, HIRC US-India hearing. 40 See, for example, ―Nuclear Nonproliferation System is Challenged,‖ People’s Daily, March 16, 2006. 41 Available at http://verificationthoughts.blogspot.com/2008/07/indian-separation-plan.html. 42 ―Concern over Russian Plan to Sell Nuclear Reactor Fuel,‖ Financial Times, March 15, 2006. 43 David S. Jonas, ―Variations on Non-nuclear: May the ‗Final Four‘ Join the Nuclear Nonproliferation Treaty as Nonnuclear Weapon States While Retaining Their Nuclear Weapons?‖ Michigan State Law Review, Summer 2005, p. 417 ff. Mr. Jonas is General Counsel of the National Nuclear Security Agency. 44 Ambassador Norman Wulf, ―Observations from the 2000 NPT Review Conference,‖ Arms Control Today, November 2000. 45 September 8, 2005, HIRC US-India hearing. 46 Fred McGoldrick, Harold Bengelsdorf, Lawrence Scheinman, ―The U.S.-India Nuclear Deal: Taking Stock,‖ Arms Control Today, October 2005, pp. 6-12. See http://www.armscontrol.org/act/2005_10/OCT-Cover.asp. 47 Statement by Robert J. Einhorn, Center for Strategic and International Studies, ―The U.S.-India Global Partnership: The Impact on Nonproliferation‖ October 26, 2005. 48 ―Backgrounder on India-U.S. Civilian Nuclear Energy Cooperation,‖ Indian Embassy, July 29, 2005. See http://www.indianembassy.org/press_release/2005/July/29.htm. 49 Prime Minister Singh, ―Excerpts from Prime Minister‘s Reply to Discussion in Raja Sabha on Civil Nuclear Energy Cooperation with the United States.‖ Remarks are available at the Indian Ministry of External Affairs website, http://mea.gov.in. 50 ―IAEA Director General Reacts to U.S.-India Cooperation Agreement,‖ See http://www.iaea.org/NewsCenter/ PressReleases/2005/prn200504.html. Critics of the IAEA point out that it is an organization that measures its success in part by how much nuclear material and how many facilities are under inspection. 51 On September 29, 2004, the State Department published Public Notice 4845 in the Federal Register imposing sanctions pursuant to the Iran Nonproliferation Act of 2000. Two Indian scientists were named—Dr. Prasad and C. Surendar. The State Department has not revealed what technology or equipment was transferred, but both scientists have worked for the Nuclear Power Corporation of India, Ltd., a government-owned entity that

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runs India‘s nuclear power plants. The Indian embassy reported in December 2005 that sanctions on Dr. Surendar had been removed. See http://www.indianembassy.org/press_release/5.asp. In the December 30, 2005 Federal Register, Public Notice 5257 stated simply that sanctions on an Indian entity issued in Public Notice 4845 had been rescinded. 52 September 8, 2005, HIRC US-India hearing. 53 ―Backgrounder on India-U.S. Nuclear Energy Cooperation,‖ July 29, 2005. 54 ―Excerpts from Prime Minister‘s Reply,‖ August 17, 2006, op. cit. 55 See Zia Mian and M.V. Ramana, ―Wrong Ends, Means, and Needs: Behind the U.S. Nuclear Deal with India,‖ Arms Control Today, January/February 2006. See also Robert Einhorn, ―Limiting the Damage,‖ The National Interest, Winter 2005/2006. 56 Statement of David Albright before the House International Relations Committee on October 26, 2005 (hereafter cited as ―HIRC October 26, 2005 hearing‖). 57 Questions for the Record Submitted to Secretary of State Condoleezza Rice by Senator Richard Lugar (#2) Senate Foreign Relations Committee, April 5, 2006. 58 White House, Office of the Press Secretary, ―Press Briefing by Under Secretary of State for Political Affairs Nick Burns,‖ Maurya Sheraton Hotel and Towers, New Delhi, India, March 2, 2006. 59 Mohamed ElBaradei, ―Rethinking Nuclear Safeguards,‖ Washington Post, June 14, 2006. 60 See Henry Sokolski, ―Fissile isn‘t Facile,‖ Wall Street Journal, February 21, 2006. 61 See Charles Ferguson, ―Reshaping the U.S.-Indian Nuclear Deal to Lessen the Nonproliferation Losses,‖ Arms Control Today, April 2008. Ferguson cites information from the Nuclear Power Corporation of India. See also ―Uranium Shortage Hits Nuclear Power,‖ The Hindu Business Line, May 21, 2008. 62 Several countries have supplied low-enriched uranium to the U.S.-origin Tarapur reactors, including France, China and Russia. 63 ―India and the Nuclear Domain.‖ Available at http://mea.gov.in/. 64 Zia Mian, A.H. Nayyar, R. Rajaraman and M.V. Ramana, Fissile Materials in South Asia: The Implications of the U.S.-India Nuclear Deal, September 2006. Available at http://www.fissilematerials.org/ipfm/site_down/rr01.pdf. 65 K. Subrahmanyam, former head of the Institute for Defence Studies and Analysis, was appointed Head of the National Security Council Advisory Board (NSCAB) established by the first Vajpayee government to draft the Indian nuclear doctrine. He currently chairs PM Singh‘s Global Strategic Developments Task Force. See also Dr. A. Gopalakrishnan, ―Civilian and Strategic Nuclear Facilities of India,‖ January 5, 2006. 66 It is worth noting that even before the NPT entered into force, negotiators recognized that a state outside the treaty could preserve its domestic uranium sources for a possible weapons program as long as it agreed to accept IAEA safeguards on the items it imported. In the late 1960s, however, Congress was more concerned about ensuring that the United States could supply its allies outside the treaty, such as Japan and Germany, with nuclear fuel. According to Mason Willrich‘s history of the NPT, As long as India does not become a party to the Non-Proliferation Treaty, it can continue to import from the parties nuclear materials and equipment subject to safeguards for use in its civil nuclear power program. This would free its indigenous resources, particularly its limited uranium supply, for possible concentration on a nuclear weapons program. (Mason Willrich, Non-proliferation Treaty: Framework for Nuclear Arms Control, The Michie Company, Charlottesville, VA, 1969, p. 125.) 67 ―India Won‘t Define Minimum N-Deterrent: Saran,‖ Press Trust of India, April 8, 2006. 68 Report Pursuant to Section 104 (c) of the Hyde Act Regarding Civil Nuclear Cooperation with India. Submitted to Congress September 10, 2008. (Hereafter cited as, ―2008 State Department Report.‖) 69 See CRS Report RL33292, India's Nuclear Separation Plan: Issues and Views, by Sharon Squassoni, for details on the separation plan. See the previous section for additional issues concerning the separation plan. 70 Prime Minister Singh presented ―Implementation of the India-United States Joint Statement of July 18, 2005: India‘s Separation Plan,‖ to Parliament on March 7, 2006. This is available at http://indianembassy.org/newsite/press_release/ 2006/Mar/sepplan.pdf. The plan was updated on May 11, 2006 to include names of reactors and upstream facilities, as well as dates they would be submitted to safeguards. 71 According to the May 11 update, the eight indigenous reactors to be safeguarded are four at Rajasthan (RAPS 3, 4, 5 & 6); two at Uttar Pradesh (NAPS 1, 2); and two at Gujrat (KAPS 1, 2). 72 Although India maintained a certain ambiguity by calling its 1974 test a ―peaceful nuclear explosion,‖ the 1998 tests leave little doubt that the experience gained was put to use in a nuclear weapons program. Plutonium produced in the CIRUS reactor, which the United States supplied with heavy water, was used in the 1974 test. See Victor Gilinsky and Paul Leventhal, ―India Cheated,‖ Washington Post, June 15, 1998. U.S. documents from the early 1970s indicate that the United States interpreted its nuclear cooperation agreement with India to prohibit peaceful nuclear explosions. Washington communicated this position to New Delhi. The documents are available at http://www.armscontrol.org/ country/india/Historic_Documents_India_Nuclear_Test.asp.

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The Additional Protocol is a measure to strengthen safeguards by providing for additional information, access and inspection tools. INFCIRC/540, concluded in 1997, is the model upon which states‘ protocols to their safeguards agreements are based. 74 Statement of Dr. Joseph, November 2, 2005, SFRC India hearing. 75 Ibid. 76 Condoleezza Rice, ―Our Opportunity With India,‖ Washington Post, March 13, 2006. 77 National Strategy to Combat Weapons of Mass Destruction, December 2002. Available at http://www.whitehouse.gov/news/releases/2002/12/WMDStrategy.pdf. 78 See also CRS Report RL33529, India-U.S. Relations, by K. Alan Kronstadt. 79 Those parties argue that the agreement would compromise India‘s sovereignty by drawing New Delhi into a ―strategic alliance‖ with Washington. See, for example, http://www.cpim.org/ for a detailed account of objections from the Communist Party of India (Marxist). 80 ―N-deal strategic to India‘s progress: Pranab Mukherjee,‖ Indo Asian News Service, February 3, 2008. 81 ―After Left Nod, Govt Decides To Go Ahead With IAEA Talks On N-Deal,‖ Financial Express, November 16, 2007. 82 Available at http://pmindia.nic.in/IaeaIndiaSGADrft.pdf. 83 Mark Hibbs and Daniel Horner, ―Pakistan, Other States Not Satisfied After Indian Briefing on IAEA Pact,‖ Nucleonics Week, July 24, 2008. 84 ―Will Support Govt That Scraps 123,‖ The Economic Times, September 8, 2008. 85 Interview with Leader of the Opposition (Lok Sabha) L.K. Advani, The Hindu, July 11, 2008; ―BJP Will Renegotiate N-Deal If Comes To Power: Sushma Swaraj,‖ The Economic Times, September 7, 2008. 86 Unless otherwise noted, this section is based on ElBaradei‘s August 1, 2008 comments to the IAEA Board of Governors, as well as personal communications with IAEA officials, and current and former State Department officials. 87 Available at http://www.iaea.org/Publications/Documents/Infcircs/2008/infcirc731.pdf. 88 ―India Notifies Separation Plan to IAEA,‖ Press Trust of India, October 16, 2009. 89 Author interview, September 23, 2008. 90 ―Indian Daily Interviews Atomic Body Chairman on Nuclear Deal,‖ The Hindu, July 20, 2008. 91 Ibid. 92 Questions for the Record Submitted to Jeffrey Bergner, Assistant Secretary for Legislative Affairs by Rep. Tom Lantos, House Committee on Foreign Affairs (#12), October 5, 2007. Available at http://www.hcfa.house.gov/110/ press090208.pdf. (Hereafter, ―Questions for the Record, 2007.‖) 93 Ibid. (#11). 94 Ibid. (#42). 95 The Consultative Group is the NSG‘s ―standing intersessional working body.‖ See http://www.nuclearsuppliersgroup.org/activities.htm. 96 A copy of the proposal is available at http://www.armscontrol.org/projects/india/20060327_DraftNSG Proposal.asp. 97 Author interviews with State Department official, February 4, 2008; August 14, 2008. 98 The August 2008 draft is available at http://www.armscontrol.org/node/3274. 99 The text of the NSG statement is available at http://www.nuclearsuppliersgroup.org/PRESS/2008-09-PressVienna.pdf. 100 Austria, Ireland, the Netherlands, New Zealand, Norway, and Switzerland issued a joint statement at the August meeting explaining that they had proposed amendments to the U.S. proposal in order to meet their ―nonproliferation objectives.‖ New Zealand‘s Disarmament and Arms Control Minister Phil Goff stated August 26 that approximately 50 amendments had been proposed to the U.S.-proposed text. 101 Mark Hibbs and Daniel Horner, ―Scope of NSG Exemption For India Yet to Be Defined by Member States,‖ Nucleonics Week, September 11, 2008. 102 Wade Boese, ―Nuclear Export Criteria Lacks Consensus,‖ Arms Control Today, June 2008. 103 See the Appendix. 104 Rama Lakshmi, ―U.S. Letter Puts India‘s Premier On Defensive Over Nuclear Deal,‖ Washington Post, September 5, 2008. 105 Text Available at http://svaradarajan.blogspot.com/2008/10/dear-bill-foreign-secretarys-letter.html. 106 ―Indo-French Pact Not to Cover Nuclear Enrichment Technology Sale - Envoy,‖ Press Trust of India, September 19, 2008. 107 ―France Willing to Reprocess Uranium for India,‖ The Hindu Business Line, January 31, 2009. 108 ―Russian president amends 1992 decree so as to ease nuclear exports to India,‖ Interfax, February 24, 2009. 109 ―Russia Delivers First Batch of Nuclear Fuel to India,‖ Press Trust of India, April 10, 2009. 110 ―Kazakhstan signs agreement to supply uranium,‖ The Hindu, January 25, 2009; Kazakhstan might start uranium exports to India in 2009,‖ Panorama, February 6, 2009. ―Chennai Daily Report: India, Kazakhstan Set To Sign Nuclear Reactor Export Deal,‖ Chennai Business Line Online, July 10, 2009. 111 ―India Signs Civil Nuclear Pact with Mongolia,‖ Press Trust of India, September 14, 2009.

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112

―Questions for the Record Submitted to Under Secretary William Burns and Acting Under Secretary John Rood by Senator Robert P. Casey, Senate Foreign Relations Committee, September 18, 2008.‖ 113 Author interview, September 23, 2008. 114 State Department Report 2008. 115 Ibid. 116 Author interviews with State Department official August 11, 2008; August 14, 2008. 117 Nuclear cooperation includes the distribution of special nuclear material, source material, and byproduct material, to licensing for commercial, medical, and industrial purposes. These terms, ―special nuclear material,‖ ―source material,‖ and ―byproduct material,‖ as well as other terms used in the statute, are defined in 42 U.S.C. § 2014. 118 P.L. 83-703, 42 U.S.C. §§ 2153 et seq. 119 In the 1954 Act, the provisions in Section 123 c. covered all agreements for cooperation. Section 123 d. was added in 1958 (P.L. 85-479) to cover military-related agreements. In 1974, P.L. 93-485 amended Section 123 d. to include agreements that covered reactors producing more than 5 MW thermal or special nuclear material connected therewith. 120 United States General Accounting Office, ―Nuclear Agreement: Cooperation Between the United States and the People‘s Republic of China,‖ GAO/NSIAD-86-21BR, November 1985, Appendix I-1. 121 42 U.S.C. 2153 a.(2). Section 4 (b) of the NNPA specifies that all other terms used in the NNPA not defined in Section 4 ―shall have the meanings ascribed to them by the 1954 Act, the Energy Reorganization Act of 1974 and the Treaty [NPT].‖ S.Rept. 95-467 further clarified that under the NPT, the five nuclear weapon states are the U.S., U.K., China, the Soviet Union, and France. U.S. Code Congressional and Administration News, 95 th Cong., 2nd sess., 1978, vol. 3, p. 329. 122 This new requirement was added by the Export Administration Amendments Act of 1985, P.L. 99-64, Section 301 (b) (2), 99 Stat. 120. 123 The language ―fails to disapprove‖ is an artifact of the 1978 Nuclear Nonproliferation Act, which used legislative vetoes in the form of concurrent resolutions of disapproval. In 1985, following the Supreme Court‘s Chadha decision invalidating the use of legislative vetoes, the Export Administration Amendments Act created a separate approval process for exempted agreements, which this part of Section 123 d. is referring to, that called for a joint resolution of approval. Thus, ―fails to disapprove‖ could be interpreted as ―approves‖ in the form of a joint resolution of approval. 124 In light of the Chadha decision, passing a concurrent resolution could invite a legal challenge. Although this is not provided for in the AEA, Congress could choose to pass a joint resolution of disapproval or a bill stating in substance it did not approve. 125 Section 128 b. (3) refers to a ―resolution of disapproval,‖ and this would likely be a joint resolution of disapproval, in light of the Chadha decision. 126 Section 128 b. (2) refers to a ―concurrent resolution.‖ In light of the Chadha decision, Congress could pass a joint resolution disagreeing with the President‘s determination, or pass a bill barring nuclear exports for a certain period of time to that country. 127 Section 129 specified that the President‘s determination ―shall not become effective if during such sixty-day period the Congress adopts a concurrent resolution stating in substance that it does not favor the determination.‖ However, P.L. 110-369 amended that section to change the ―concurrent resolution‖ provision to a ―joint resolution,‖ presumably to overcome potential issues raised by the Chadha decision.. 128 See CRS Report RL33561, U.S.-India Nuclear Cooperation: A Side-By-Side Comparison of Current Legislation, by Sharon Squassoni and Jill Marie Parillo (hereafter cited as CRS Report RL33561) for more detail on the bills. 129 See H.Rept. 109-590 and for S.Rept. 109-28 8, dated July 20, 2006, background on the bill. 130 See http://www.whitehouse.gov/news/releases/2006/12/20061218-12.html. 131 Department of State Fact Sheet July 27, 2007, at http://www.state.gov/r/pa/prs/ps/2007/89552.htm. 132 See, for example, Sharon Squassoni, ―Issues in U.S.-India Nuclear Cooperation,‖ November 7, 2007 http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=19697&prog=zgp&proj=znpp,zsa, and Daryl G. Kimball and Fred McGoldrick ―U.S.-Indian Nuclear Agreement: A Bad Deal Gets Worse,‖ August 3, 2007, at http://www.armscontrol.org/pressroom/2007/20070803_IndiaUS.asp?print. 133 Questions for the Record, 2007 (#8). 134 Ibid. (#s 4 and 5). 135 As noted above, the President retains the right to waive the termination of nuclear exports. 136 In a February 18, 2008 statement, Saran asserted that, under the 123 agreement, India is entitled to build a strategic fuel reserve ―to last the lifetime of such reactors.‖ 137 ―BJP, Left On ‗Unholy Alliance‘ To Oppose N-Deal: Congress,‖ Press Trust of India, September 5, 2008. 138 As noted above, the President‘s signing statement says that he ―shall construe‖ Section 103 as ―advisory.‖ 139 Questions for the Record, 2007 (#16). 140 Ibid. (#18). 141 Ibid. (#19-20).

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H.R. 7039, a bill identical to H.R. 7081, was introduced by Representative Alana Ros-Lehtinen September 24. The next day, Representative Howard Berman introduced H.R. 7061, a bill very similar to H.R. 7081. 143 H.R. 7061 required the President to consult with the House Foreign Affairs Committee and the Senate Foreign Relations Committee regarding any such initiative or negotiations. 144 Analyst interview with U.S. officials, November 3, 2009. 145 Rama Lakshmi, ―Despite Historic Pact, U.S. Firms Are Hampered in Setting Up Reactors in India,‖ The Washington Post, January 21, 2009. T.S. Subramanian, ―India Atomic Body Chief: 123 Agreement Gives Spent Fuel, Reprocessing Rights,‖ The Hindu, August 3, 2009. 146 Senator Richard G. Lugar Pre-Hearing Questions for the Record Nomination of Ellen M. Tauscher to be Under Secretary of State for Arms Control and International Security. http://lugar.senate.gov/ sfrc/pdf/TauscherQFR.pdf 147 See CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth Nikitin.

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CHAPTER SOURCES The following chapters have been previously published:

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Chapter 1 – This is an edited, reformatted and augmented version of a Congressional Research Service publication, Report R40094, dated October 1, 2009. Chapter 2 - This is an edited, reformatted and augmented version of a Congressional Research Service publication, Report RS20871, dated October 8, 2009. Chapter 3 - This is an edited, reformatted and augmented version of a Congressional Research Service publication, Report RL34248, dated October 15, 2009. Chapter 4 - This is an edited, reformatted and augmented version of a Congressional Research Service publication, Report RL34544, dated October 21, 2009. Chapter 5 - This is an edited, reformatted and augmented version of a Congressional Research Service publication, Report R40344, dated October 28, 2009. Chapter 6 - This is an edited, reformatted and augmented version of a Congressional Research Service publication, Report RL33016, dated November 5, 2009.

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INDEX

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A ABC, 107, 112 accidental, 55, 60, 62 accountability, 143 accounting, 149, 152 accuracy, 78 achievement, 136, 141, 142 acquisitions, 36, 58 acts of aggression, 20 administration, 59, 64, 65, 83, 87, 99, 100, 120, 124, 136, 144 administrative, 24, 59, 62 affiliates, 48 age, 111 agent, 99 aggression, 20, 58 agriculture, 38, 101 aid, vii, 27, 34, 35, 36, 39, 41, 43, 44, 56, 65, 66, 68, 85, 106, 107, 130, 133 air, 20, 58, 59, 61, 71, 97 Air Force, 45, 46, 57, 59 aircraft, 48, 68 allies, viii, 28, 29, 30, 43, 50, 119, 124, 154 alternative, 75, 134, 135 aluminum, 111 ambiguity, 58, 154 amendments, 30, 103, 124, 155 ammonium, 82 analysts, 58, 75, 88, 130 annual rate, 98 anomalous, 140 application, 23, 28, 30, 36, 38, 126 appropriations, 38, 41, 43 Appropriations Committee, 36, 51 argument, 94, 130

Armed Forces, 46, 48, 106 army, 50, 57, 59, 61 asia, viii, 28, 34, 40, 48, 55, 57, 58, 60, 67, 68, 69, 70, 89, 111, 152, 153, 154 asian, 31, 68, 111, 112, 155 asian firms, 31 assassination, 50, 62 assessment, 54, 66, 67, 82, 83, 87, 92, 93, 141 assets, 41, 42, 43, 44, 46, 54, 58, 60, 61, 62, 70, 92, 105 Atomic Energy Act (AEA), ix, x, 13, 14, 51, 73, 75, 95, 100, 101, 103, 104, 109, 110, 111, 112, 115, 116, 117, 119, 130, 134, 139, 140, 141, 142, 143, 146, 148, 149, 150, 152, 156 Atomic Energy Act Atomic Energy Commission, 133 atomic weapon, 92 attacks, 54, 56, 84, 97 authenticity, 15 authority, 16, 18, 19, 30, 42, 59, 76, 96, 116, 141, 143, 144 autonomy, 121, 151

B background information, vii, 96 ballistic missile, x, 43, 48, 57, 58, 69, 85, 90, 96, 105 banking, 40, 46, 105 banks, viii, 27, 38, 40, 43, 105, 151 batteries, 46 behavior, 31 beliefs, 74 benefits, 108, 119, 123, 126 beryllium, 90 Best Practice, 108 bilateral relations, 109 bilateral trade, vii, 27, 97

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Index

binding, 18, 100, 101, 139, 147 biological weapons, 64, 71, 122 black market, 63, 125 blame, 37 board members, 133 Board of Governors, vii, 13, 14, 16, 18, 19, 21, 22, 76, 78, 90, 101, 116, 117, 121, 133, 138, 155 bomb, ix, 53, 76, 92, 107, 132 bonds, 29 border crossing, 71 border security, 101 breaches, 19, 20, 22 breakdown, ix, 54 breeder, 24, 132 British Petroleum, 37 budget resolution, 36 buildings, 41, 80, 83 Bush Administration, ix, 31, 33, 34, 38, 42, 45, 64, 95, 97, 100, 104, 108, 118, 120, 125, 144

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C cargo, 43, 71 carpets, 38 cast, 59, 79, 86 caviar, 38 CCC, 69 cell, 23 CENTCOM, 97 Central Asia, 111, 112 Central Bank, 40, 106 Central Intelligence Agency (CIA), 55, 67, 71, 74, 83, 86, 87, 88, 89, 93, 122 certification, 64, 68, 109, 149, 150 chain of command, 59 channels, 21, 135 chemicals, 48, 71 chloride, 122, 153 civil action, 41 civilian, viii, ix, x, 28, 38, 54, 55, 59, 62, 67, 71, 75, 76, 95, 107, 119, 126, 128, 129, 130, 131, 132, 133, 134, 144, 147, 148, 153 classification, 90 climate change, 151 Clinton Administration, 29, 30, 38 CNN, 61, 69, 70 coal, 98, 120 codes, 59, 62, 70 coherence, 25 cohesion, 123

collaboration, 119 commander-in-chief, 45 commerce, 118, 124, 128 Committee on Intelligence, 63, 71, 92 Committee on Oversight and Government Reform, 94 Common Foreign and Security Policy, 77 communication, 20, 24, 25, 59, 71, 90 Communist Party, 133, 155 community, ix, 55, 73, 80, 86, 87, 88, 151 compensation, 44, 99 competence, 19 complement, 29 compliance, 15, 17, 19, 20, 21, 24, 76, 89, 119, 130 components, 21, 24, 79, 93, 101, 102, 107, 109, 112, 145, 146 compounds, 14, 23, 75, 77 Comprehensive Test Ban Treaty, 56, 125 concealment, 19, 23, 59 concentration, 14, 75, 154 concrete, 76, 126 conditioning, 65 confidence, viii, ix, 19, 53, 54, 61, 63, 86, 87, 88, 107, 131, 133 configuration, 83, 92 conflict, 36, 58, 60, 61, 96 conformity, 23 confrontation, 30 Congressional Record, 67, 71 connectivity, 131 consensus, 59, 117, 124, 133, 136 consent, 29, 67, 102, 111, 135, 140, 143, 150 conservation, 38 conspiracy, 105 constitution, 69, 139, 144 constraints, 57, 88, 130 construction, vii, viii, 13, 14, 15, 17, 21, 24, 28, 33, 34, 36, 45, 46, 56, 68, 75, 80, 89, 99, 108, 131, 136, 145 consulting, 99, 119 consumption, 31, 37, 74, 97 Container Security Initiative, 71, 106 contingency, 62, 70 continuity, 112 contractors, 38, 108 contracts, xi, 35, 39, 44, 99, 108, 116, 118, 150 control, viii, x, 28, 29, 42, 44, 53, 54, 55, 59, 60, 61, 62, 64, 65, 66, 71, 96, 99, 101, 105, 106, 109, 112, 117, 119, 124, 125, 126, 127, 130, 134, 139, 144, 151, 152

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Index conversion, ix, 14, 16, 22, 73, 75, 77, 78, 82, 83, 86, 88, 152 costs, 74, 98 Council of Ministers, 96 counterterrorism, 30, 96 credibility, 87, 137 credit, 29, 35, 38 crimes, 105 criticism, 38 CRS, 13, 14, 27, 28, 33, 37, 42, 51, 53, 54, 68, 69, 71, 73, 74, 89, 90, 92, 95, 96, 111, 112, 115, 152, 153, 154, 155, 156, 157 crude oil, 98 cruise missiles, 58, 70, 71 currency, 40

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D DCI, 24, 90 death, 96 decision-making process, 94 decisions, viii, 20, 27, 57, 85, 97, 98, 122, 135, 139 defense, x, 45, 74, 79, 103, 115, 116, 127, 141, 142 Defense Authorization Act, 41 definition, 21, 23, 33, 34, 35, 50 delivery, viii, 53, 55, 56, 57, 60, 64, 88, 98, 130 denial, 25, 29, 42 Department of Commerce, 105 Department of Defense, 60, 61, 67, 68 Department of Energy, 62, 71, 86, 106, 111 Department of Justice, 104, 112 Department of State, x, 25, 89, 92, 103, 115, 116, 156 deposits, 86 desalination, 99 destruction, 29, 42, 43, 71, 119, 151 detection, 71, 83, 107 deterrence, 57, 58, 61, 69 diesel, 98 Director of National Intelligence, 61, 63, 85, 93, 103 disaster, 41 discriminatory, 118, 121, 126, 151 disputes, 44 disseminate, 65 distribution, 156 download, 24, 70 draft, 23, 74, 78, 99, 126, 132, 134, 135, 154, 155 dual-use items, 105, 107, 145, 152 dumping, 38 durability, ix, 53

duration, 103, 140 duties, 19, 144

E early warning, 99 earthquake, 38, 41 economic activity, 98 economic development, 66 education, 69, 120 election, 36, 37, 43, 44 electricity, 74, 89, 97, 98, 99, 129, 131, 132, 137 employment, 59 energy consumption, 97 Energy Policy Act, 51 Energy Policy Act of 2005, 51 engagement, 37 environment, 101, 145 equity, 29, 34, 50 European Union, 30, 77 evolution, 39 Executive Order, vii, 27, 29, 31, 38, 42, 45, 46, 48, 50, 51, 64, 105 exercise, 43, 96, 116, 131, 135, 143, 146, 151 expertise, 59, 63, 65, 66, 85 explosives, 60, 78, 142 export controls, x, 55, 64, 65, 71, 96, 99, 104, 109, 119, 123, 124, 126, 137, 151 exporter, 31 Export-Import Bank, 29, 64 extraction, 122 extremism, 67

F FAA, 41 fabrication, 78, 131, 152 failure, 17, 21, 23, 54, 56, 64, 81, 108, 141 faith, 41, 108, 125 false statement, 86 family, 107 Fast Breeder Reactors, 24, 131 fatwa, 87 fear, ix, 53, 54, 148 Federal Register, 32, 112, 153 feeding, 81 feedstock, ix, 73, 81, 82, 88 feelings, 109 feet, 29, 31, 35, 98

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164

Index

fighters, 50 finance, 38, 40 financial aid, 56 financial institution, 29, 35, 106 financial resources, 67 Financial Services and General Government, 51 financing, 35, 40, 50 firms, vii, viii, xi, 27, 28, 29, 30, 31, 33, 34, 35, 36, 37, 38, 39, 42, 44, 49, 50, 93, 99, 116, 117, 118, 136, 138, 150 first generation, 81 fissile material, viii, ix, 14, 53, 55, 60, 68, 73, 74, 75, 80, 82, 83, 87, 88, 106, 111, 116, 124, 125, 126, 127, 130, 132 flight, 44 flow, 34 focusing, 31 food, 38 foreign affairs, 144 foreign aid, vii, 27, 36, 41, 43 foreign assistance, 31, 41, 66, 139 foreign banks, 40 foreign exchange, 36 foreign experts, 74 foreign firms, vii, viii, 27, 28, 29, 35, 36 foreign investment, viii, 27, 29, 31, 34, 86 Foreign Military Sales, 44 foreign policy, 121, 141 Foreign Relations Committee, 21, 23, 63, 65, 66, 67, 70, 71, 103, 109, 117, 120, 131, 136, 142, 149, 150, 152, 153, 154, 156, 157 fossil, 74 fossil fuel, 74 free trade, 97 free trade agreement, 97 freedom, 44 Freedom Support Act, 30 freezing, 44 fruits, 38 frustration, 33 fuel cycle, 21, 89, 116, 118, 121, 122, 124, 127, 143 funds, viii, 28, 29, 40, 44, 45, 62, 66, 67 fusion, 119

General Accounting Office, 156 General Electric, 38, 39 generation, 81, 82, 98, 99 Global Nuclear Energy Partnership, 101 goals, 37, 111, 119, 132 good faith, 41 Government Accountability Office, 65 government policy, 98 government procurement, 29 government revenues, viii, 27 governors, 133 grain, 107 grants, 106, 150 greed, vii, 13, 15, 30, 32, 35, 78, 85, 125, 135 groups, viii, 27, 48, 54 growth, 120 growth rate, 120 guidelines, 56, 62, 71, 117, 118, 119, 123, 124, 126, 127, 135, 139, 143, 144, 151 guiding principles, 97

H handling, 23, 40, 98 hands, 54, 61, 96 harmonization, 119, 151 hazards, 54 hearing, 21, 54, 56, 62, 63, 85, 120, 121, 123, 128, 130, 136, 147, 152, 153, 154, 155 heavy water, 14, 17, 18, 24, 84, 90, 118, 122, 131, 135, 143, 145, 152, 154 high-level, 58 HIV, 38 Homeland Security, 65, 70 host, 111 House Appropriations Committee, 36, 51 hub, 96, 104, 131 human, 66, 99, 100, 101, 112 human capital, 100 human resources, 99 human rights, 66, 113 humanitarian, vii, 27, 40

I

G gas, viii, 14, 15, 17, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 39, 46, 55, 74, 75, 83, 86, 98, 111, 121, 122 gasoline, viii, 28, 34, 35, 36, 37, 43 GDP, 29

ice, 34, 144 identification, 134 ideology, 29 imagery, 80, 84

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165

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Index implementation, 17, 23, 65, 79, 80, 97, 100, 106, 123, 132, 135, 139 imports, 30, 34, 37, 98 imprisonment, 60 INA, 51 incentives, 43, 77, 90, 98 inclusion, 142 independence, 121 Indian, viii, 34, 49, 53, 55, 57, 58, 61, 68, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 134, 135, 136, 138, 139, 143, 146, 147, 152, 153, 154, 155, 156 indication, 108 indigenous, 56, 75, 86, 100, 128, 129, 130, 131, 154 induction, 57 industrial, 82, 88, 98, 107, 111, 156 industry, 29, 40, 99, 101, 108, 128, 153 ineffectiveness, 37 infrastructure, 29, 43, 56, 83, 86, 92, 101 INS, 139 inspection, 80, 83, 91, 92, 142, 153, 155 inspectors, 15, 16, 17, 19, 76, 78, 80, 142 instability, ix, 54, 60, 97 institutions, 35, 41, 66, 67, 106 instruments, 99, 111 insurance, viii, 28, 36, 41 integrity, 55, 58 intelligence, 29, 55, 59, 61, 63, 74, 80, 81, 82, 83, 86, 87 Intelligence Committee, 65, 93 Intelligence Community, 93 intelligence gaps, 86 intentions, 22, 130 interactions, 75 interference, 121 International Atomic Energy Agency (IAEA), vii, ix, 13, 14, 24, 57, 61, 73, 75, 84, 89, 97, 115, 140 International Atomic Energy Agency international investment, 31 International Monetary Fund, 40 International Space Station, 42 international standards, 151 international terrorism, 41, 42 Internet, 44 interval, 146 interview, 16, 55, 60, 61, 62, 63, 64, 69, 70, 75, 82, 83, 84, 90, 91, 92, 107, 111, 130, 133, 155, 156, 157 investigative, 90

investment, vii, viii, 27, 28, 29, 30, 31, 33, 34, 35, 38, 39, 43, 44, 50, 86 investors, 31, 40 Iran Sanctions Act, viii, 27, 28, 30, 39, 43, 44 irradiation, 23, 101 ISC, 94 Islamic, 29, 39, 43, 46, 48, 62, 69, 70, 74, 83, 89, 90, 91, 92, 93, 94, 105 isolation, 31 isotope, 14, 75, 111

J Japanese, 82 Joint Chiefs, 54 Joint Committee on Atomic Energy, 25 joint ventures, 99 judges, 82, 87 judgment, ix, 44, 73, 142 jurisdiction, 101, 105, 134 justification, 21

K korean, 49, 112, 125

L language, 104, 108, 110, 134, 135, 156 laser, 22, 23, 49 laundering, 40 law, ix, x, xi, 30, 37, 38, 42, 63, 66, 67, 95, 96, 99, 103, 105, 106, 107, 115, 116, 117, 124, 128, 139, 143, 144, 145, 147, 148 law enforcement, 63, 66 lawsuits, viii, 28, 35 leadership, 16, 54, 60, 77 leakage, 59 legislation, viii, x, xi, 28, 29, 30, 36, 37, 64, 65, 66, 67, 68, 71, 96, 97, 109, 110, 116, 117, 119, 139, 142, 143, 147, 151 legislative proposals, vii, 96 lending, vii, 27, 41 letters of credit, 38 licenses, xi, 29, 38, 101, 107, 116, 117, 141, 149 lifetime, 128, 134, 146, 147, 156 limitations, 40, 129 LNG, 31, 33, 35 loans, 29, 41, 106

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166

Index

location, 34, 80, 92 long period, 81 loopholes, 42 loss of control, 62 losses, 44

N

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M mainstream, 120 maintenance, 19, 36 management, 98, 99, 100, 108, 137 manufacturer, 49 manufacturing, 79, 81, 91, 118, 124 market, vii, 27, 34, 37, 38, 39, 56, 63, 97, 120, 125, 126, 127, 129 meanings, 148, 156 measures, 17, 18, 19, 20, 25, 28, 29, 37, 40, 55, 59, 62, 65, 97, 104, 110, 126, 127, 129, 134, 146, 153 medical products, 38 medicine, 101 megawatt, 56, 85, 122 membership, 152 memorandum of understanding, ix, 95, 137 men, 105 metric, 81, 137 Middle East, i, iii, iv, vii, 40, 74, 89, 97, 100, 102, 108, 110, 111, 112 militant, viii, 27, 54 militias, 50 million barrels per day, viii, 27, 31 million standard cubic feet per day, 98 mining, 79, 101 misleading, 75 misleading statements, 75 missiles, x, 43, 46, 57, 58, 59, 60, 64, 69, 70, 71, 85, 88, 96, 105 missions, 55, 97 mixing, 68 modalities, 15 modernisation, 59 money, 30, 40, 48, 62, 104 money laundering, 40 moratorium, 119, 125, 126, 127, 135, 136, 151 motion, 62 motives, 97 MOU, 100, 107 movement, viii, 28, 40, 59, 61, 88, 106 multilateral, 28, 31, 37, 38, 41, 43, 50, 64, 71, 98, 117, 126, 127, 143, 151

NASA, 42 nation, 70, 74, 98, 122, 135, 141, 142, 150, 151 National Academy of Sciences, 31, 51, 93 National Defense Authorization Act, 41 National Emergencies Act, 42 National Intelligence Estimate (NIE), 21, 73, 80, 82, 83, 84, 86, 87, 88, 89, 92, 93 national interests, 65 National Public Radio, 83 national security, 30, 54, 66, 67, 87, 102, 103, 144, 145 National Security Council, 24, 55, 67, 68, 89, 90, 154 National Strategy, 132, 155 natural, viii, 22, 28, 29, 31, 33, 35, 84, 86, 98, 111, 129 natural gas, viii, 28, 29, 31, 33, 35, 86, 98, 111 navy, 59, 68 NBC, 70 NCA, 59, 69 Near East, 111, 112 negotiation, 23, 43, 100, 103, 104, 109, 151 network, viii, 50, 53, 55, 60, 63, 64, 65, 66, 79, 105 neutron source, 79 newspapers, 34 NGOs, 92 NIC, 92 Non-Aligned Movement (NAM), 121, 122 non-binding, 139 non-nuclear, 14, 21, 23, 24, 58, 60, 76, 78, 99, 102, 110, 118, 123, 124, 125, 127, 129, 137, 139, 140, 141, 142, 146, 150, 152 nonproliferation, iv, 62, 66, 67, 100, 101, 102, 103, 106, 108, 112, 118, 120, 121, 122, 123, 124, 125, 126, 127, 130, 132, 135, 136, 141, 142, 147, 151, 152 nuclear arms race, 57, 151 nuclear energy, x, 18, 23, 55, 95, 97, 98, 99, 100, 101, 108, 110, 111, 115, 118, 119, 120, 121, 122, 126, 136, 137, 138, 146 nuclear material, x, 15, 16, 17, 22, 23, 63, 66, 79, 80, 83, 91, 99, 101, 107, 110, 111, 115, 119, 124, 126, 127, 132, 134, 137, 140, 142, 146, 150, 151, 152, 153, 154, 156 nuclear power, ix, 14, 63, 74, 75, 76, 83, 85, 86, 89, 92, 93, 95, 97, 98, 99, 100, 106, 107, 108, 111, 118, 120, 129, 136, 137, 147, 148, 154 nuclear power plant, ix, 63, 95, 97, 98, 99, 111, 137, 154

Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

Index nuclear reactor, ix, 14, 56, 73, 75, 89, 98, 101, 106, 107, 111, 119, 129, 132, 134, 137, 152 Nuclear Regulatory Commission (NRC), 99, 116, 117, 118, 141, 149 Nuclear Suppliers Group (NSG), x, 68, 115, 117, 118, 119, 122, 123, 124, 125, 126, 127, 129, 134, 135, 136, 137, 139, 143, 144, 147, 148, 149, 152, 155 nuclear talks, 31 nuclear technology, x, 30, 65, 71, 85, 86, 96, 97, 104, 108, 112, 118, 119, 122, 128, 131, 142, 145

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O obligation, 45, 101, 123, 141 observations, 24 OCT, 153 Office of Foreign Assets Control (OFAC), 38, 105 Office of Technology Assessment, 94 offshore, 33 oil, viii, 27, 28, 29, 31, 32, 33, 34, 35, 36, 38, 39, 46, 74, 86, 93, 96, 97, 98, 111 oil production, viii, 27, 31, 93 oil refineries, viii, 28, 34, 36 oil revenues, viii, 27 omnibus, 33 online, 90, 91, 98, 153 openness, 87 opportunity costs, 98 opposition, 57, 121, 132, 133 oral, 87 organ, 19 oversight, 94, 119 ownership, 36 oxide, 14, 75, 82

P Pacific, 93, 111 Pakistani, viii, ix, 50, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 70, 71, 79, 82, 124, 125 parliament, 126, 128, 154 partnership, x, 108, 115, 118, 119, 120, 127, 137 passenger, 38, 44 Patriot Act, 30, 40 penalties, vii, 27, 28, 64 pension, 44 Pentagon, 70 periodic, 96, 104, 108

167

permissive, 62 permit, 38, 85, 124, 137 personal communication, 24, 90, 155 petrochemical, 32, 34 petroleum, 29, 33, 34, 35, 36, 37, 50, 51, 93 petroleum products, 36 photographs, 87 physics, 88 pipelines, 50 planning, 59, 61, 91 plants, ix, 33, 34, 35, 63, 95, 97, 98, 99, 111, 130, 131, 132, 135, 136, 137, 154 PLC, 46 plutonium, 14, 23, 24, 55, 56, 68, 71, 75, 77, 81, 84, 85, 90, 94, 101, 102, 106, 107, 111, 129, 132, 135, 140 political instability, 54, 60, 97 politicians, 50 politics, 67 polonium, 90 population, 137 ports, 71 posture, 58, 130 power, ix, 14, 24, 33, 58, 61, 63, 69, 74, 75, 76, 83, 85, 86, 89, 92, 93, 95, 97, 98, 99, 100, 101, 106, 107, 108, 111, 118, 120, 122, 128, 129, 131, 132, 133, 136, 137, 144, 147, 148, 154 power generation, 98 power plant, ix, 33, 63, 95, 97, 98, 99, 111, 137, 154 pragmatic, 128 pre-existing, 39 prejudice, 85 preparedness, 99 presidency, 144 president, 96, 123, 155 pressure, viii, ix, 27, 31, 37, 40, 73, 85, 86, 93, 106, 122, 126 private, 44 probability, 61 production, viii, 14, 18, 21, 22, 23, 24, 27, 31, 36, 46, 53, 55, 56, 75, 79, 82, 83, 84, 88, 93, 97, 111, 116, 122, 125, 127, 129, 130, 132, 135, 137, 143, 145, 151, 152 production technology, 97, 145 profit, 31 pro-Iranian, 50 property, iv, 36, 44, 48 protection, 60, 101, 102, 152 protocol, 16, 76, 77, 79, 90, 123, 138 prototype, 21, 24, 131

Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

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Index

proxy, 58 PSI, 123 public, viii, ix, 16, 50, 53, 56, 67, 73, 76, 80, 85, 87, 92, 123, 133, 142, 144 punishment, 60

Q query, 111 questioning, 65, 144

revenue, 36, 98 rice, 78 risk, x, 40, 55, 60, 68, 85, 88, 102, 103, 105, 107, 110, 115, 116, 132, 152 RNA, 153 rods, 81 royalty, 50 Rules Committee, 66 Russian, 34, 42, 43, 49, 61, 64, 74, 78, 85, 94, 137, 153, 155

S

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R race, 56, 57, 151 radiation, 71, 101 radio, 20 radioactive waste, 101 rail, 20 range, vii, 27, 43, 58, 69, 88, 93 reaffirmation, 151 reality, 92 reasoning, 21, 120, 149 recognition, 110, 126, 128 re-export, 105 refineries, viii, 28, 34, 36 reforms, ix, 53, 60 regional, 57, 58, 69, 97, 102 regular, 124, 135 regulations, viii, x, 27, 64, 96, 99, 105, 110, 139, 145 regulatory bodies, 97 Regulatory Commission, xi, 99, 116, 117, 118, 141 relationship, 28, 39, 80, 109, 120, 121, 122, 125, 144, 151 relevance, 21, 24 reliability, 59, 62, 65 religiosity, 87 renewable energy, 120 reporters, 61, 64, 77, 104, 106, 128 resale, 44 research and development, 17, 18, 59, 77, 81, 83, 88, 121 reserves, 29, 86, 128, 129, 130, 147 resolution, ix, 15, 16, 18, 19, 20, 22, 35, 36, 74, 76, 77, 90, 95, 103, 106, 109, 112, 117, 118, 121, 141, 145, 150, 156 resources, 29, 33, 34, 35, 50, 67, 99, 101, 129, 130, 137, 154 responsibilities, 106, 119, 127 retaliation, 58

safety, x, 38, 51, 96, 97, 98, 100, 104, 108, 124, 126, 128, 132, 135, 152 sales, 35, 36, 37, 38, 41, 43, 49, 50, 58, 68, 97, 112, 123, 125, 135 sanctions, vii, viii, ix, x, 19, 20, 27, 28, 29, 30, 31, 32, 33, 35, 36, 37, 39, 40, 41, 42, 43, 50, 51, 56, 64, 68, 73, 96, 106, 122, 126, 139, 153 satellite, 80, 84 satellite imagery, 80, 84 school, 38 seals, 90 secret, 55, 60, 83, 84 secretariat, 59, 133 Secretary of Commerce, 106, 112 Secretary of Defense, 92 Secretary of State, ix, xi, 34, 35, 61, 62, 63, 65, 70, 71, 95, 100, 108, 116, 117, 120, 128, 131, 136, 144, 152, 153, 154, 157 Security Council, vii, viii, ix, 13, 14, 15, 16, 18, 19, 20, 24, 27, 35, 40, 43, 50, 55, 67, 68, 73, 76, 77, 85, 89, 90, 91, 94, 106, 112, 120, 121, 154 seismic, 56 seizure, 45, 106 selecting, 98, 102 Senate Foreign Relations Committee, 21, 23, 63, 65, 66, 67, 70, 71, 103, 109, 117, 120, 131, 136, 142, 149, 150, 152, 153, 154, 156, 157 sensitivity, 54 separation, xi, 23, 68, 77, 84, 116, 117, 127, 131, 132, 133, 139, 149, 153, 154 series, ii, 66, 78, 103 services, iv, viii, 28, 36, 39, 46, 48, 50, 59, 99, 101, 105 shares, 44 shipping, viii, 28, 36, 78 shock, 79 shoot, 44

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Index sign, 16, 34, 56, 76, 99, 119, 151 sine, 112 sites, 16, 22, 54, 55, 59, 61, 62, 68, 76, 82, 99, 117, 137 smoking, 76 soft drinks, 39 software, 79 solar, 98 South Asia, 55, 57, 58, 60, 67, 68, 69, 70, 89, 154 sovereignty, 54, 62, 67, 125, 155 space station, 42, 51 specificity, 111 speech, 54, 55, 70, 74, 123 spent nuclear fuel, 68, 85, 102, 106, 111, 137, 149 sponsor, 109 stability, 54, 57, 65 standards, 100, 102, 108, 151 State Department, 21, 22, 25, 32, 33, 40, 63, 64, 67, 68, 82, 89, 91, 92, 93, 99, 100, 103, 104, 107, 108, 111, 112, 113, 123, 130, 133, 134, 138, 139, 145, 147, 148, 153, 154, 155, 156 state-owned, 37 stockpiling, 24, 64, 151 storage, 22, 23, 59, 60, 61, 62, 98, 102, 140 strategic assets, 58, 61, 62 Strategic Petroleum Reserve, 36 strategies, 58 stress, 62, 97 strikes, 60 subsidies, 37 superiority, 57, 58 suppliers, 37, 79, 86, 98, 109, 124, 135, 136, 147 supply, viii, 27, 30, 34, 36, 37, 63, 71, 75, 77, 82, 83, 85, 89, 98, 107, 123, 124, 129, 133, 134, 137, 146, 147, 148, 152, 154, 155 supply disruption, 75, 147 Supreme Court, 139, 156 surveillance, 59 survivability, 59 suspects, 30 sustainability, 137 symbolic, 126 systems, 46, 55, 56, 57, 60, 61, 64, 69, 109, 130

T takeover, ix, 53 Taliban, 54, 60, 70 tangible, 100, 108, 109 targets, 23, 57, 58, 104, 129

169

tariff, 38, 137 technical assistance, ix, 43, 95, 101, 109 Technology Assessment, 94 technology transfer, 118, 130 television, 50, 57, 61, 69, 83, 84, 130 tension, 147 terminals, 35, 109 territorial, 58 territory, 101 terrorism, 30, 38, 40, 41, 42, 44, 152 terrorist, 29, 48, 54, 56, 63, 97, 132 terrorist attack, 56, 97 terrorist groups, 48, 54 terrorist organization, 29, 63 testimony, 21, 24, 40, 61, 65, 90, 91, 93, 127 theft, 60, 63 threat, 20, 30, 31, 33, 54, 65, 66, 67, 74, 120, 121, 133, 151 threshold, 32, 50, 57, 58 time, vii, ix, 13, 16, 22, 23, 30, 31, 35, 37, 43, 60, 61, 62, 81, 82, 85, 92, 93, 95, 98, 102, 103, 110, 117, 121, 122, 125, 143, 150, 156 time frame, 82, 92, 122 time periods, 103 timetable, 78, 83 torture, 107 trade, vii, viii, x, xi, 27, 28, 29, 30, 31, 35, 36, 38, 39, 40, 51, 96, 97, 115, 116, 117, 119, 135, 138 trade agreement, 97 tradition, 121 training, 38, 50, 99, 101 transactions, 36, 38, 40, 42, 43, 49 transcript, 67, 70 transfer, 22, 23, 42, 43, 78, 102, 109, 111, 112, 122, 123, 126, 127, 130, 135, 137, 140, 143, 145, 147, 148 transitions, 59 transmission, 98 transnational, 54 transparency, 17, 18, 62, 79, 132 transport, 33, 34 transportation, 51 transshipment, 104, 105, 106 travel, 43 treasury, 38, 40, 105 Treasury Department, 38, 40, 105 trial, 29, 30 triggers, 29 tritium, 68, 122 trust, 109

Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,

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Index

turbulence, 60 Turkmenistan, 34

vision, 120, 151 voice, 29 vulnerability, viii, 27

U U.N. Security Council, vii, 13, 14, 16, 18, 19, 20, 35, 40, 43, 112, 121 U.S. military, 61, 65, 66, 97 U.S. Secretary of Commerce, 106, 112 UN General Assembly, 74, 151 uncertainty, 89 unclassified, x, 103, 115, 116, 122 United Arab Emirates (UAE), ix, x, 42, 46, 49, 50, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112 United Nations, viii, 19, 20, 27, 37, 42, 43, 106, 120 uranium enrichment, vii, ix, x, 13, 14, 15, 16, 17, 24, 43, 46, 47, 55, 63, 71, 73, 74, 76, 77, 79, 80, 83, 86, 96, 99, 104, 107, 121, 125, 143, 145 uranium hexafluoride, 14, 22, 75, 78, 79, 81, 91 uranium oxide, 14, 75, 82 USA Patriot Act, 30, 40

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V vehicles, viii, 42, 53, 55, 56, 57, 60, 71, 78, 85, 88 venue, 20 vessels, victims, 41, 45 violence, 50

W war, 55, 58, 60, 61, 62, 86 warfare, 45 waste management, 99, 137 wastes, 23 water, vii, ix, x, 13, 14, 15, 17, 18, 24, 43, 56, 73, 74, 75, 77, 81, 84, 85, 90, 96, 101, 107, 118, 122, 131, 135, 143, 145, 152, 154 Weapons of Mass Destruction (WMD), 24, 29, 30, 42, 43, 49, 63, 71, 90, 91, 92, 94, 105, 106, 109, 112, 119, 122, 132, 151, 153, 155 White House, 94, 152, 154 wind, 98 winning, 34 wisdom, 74 withdrawal, 92 witnesses, 152 World Bank, 41 World Trade Organization (WTO), 30 worry, 54, 61

Y yield, 29, 37, 68

Nuclear Ambitions and Issues in the Middle East, Nova Science Publishers, Incorporated, 2010. ProQuest Ebook Central,